Draft Act on Amendment to the Revenue Code (as approved by the Cabinet on 9 June 2020)

Draft Act on Amendment to the Revenue Code in Regard to Value Added Tax (VAT) Applied to E-Services Industry


by Panisa Suwanmatajarn and Pithayut Ra.thee

The Thai government has realized on a global expansion of the e-service industry. In order to update rules and regulations to have it more appropriate and create fair treatment between the local and overseas e-service operators, on 9 June 2020, the Cabinet approved the Draft Act on Amendment to the Revenue Code in Regard to Value Added Tax (VAT) Applied to E-Service Industry (No. [..]), B.E. [….] (“Draft Act”).
Summary of the Draft Act are as follows:

  • The definition of “Goods” shall be revised to include e-service and e-platform.
  • A service provider fallen under the provisions of this Draft Act shall be the provider operating its businesses abroad, but providing its service to a consumer/user who is a non-VAT registrant and that the service provided has been used in the Kingdom. In case that the overseas service provider using an overseas e-platform in providing the service to the non-VAT registrant and that such service has been used in the Kingdom, the overseas e-platform operator shall also has its obligation under this Draft Act on behalf of such overseas service provider.
  • Such foreign service provider / e-platform operator needs to have its income more than 1.8 million baht per year in regard to the said service and then it is required to file VAT registration and have the responsibility to pay VAT in which VAT shall be calculated based on sales tax without deduction of purchases tax. In this case, the VAT statement can be submitted in an electronic form.

This Draft Act will be submitted to the Parliament for its consideration and approval before publishing in the Royal Gazette and then become enforced.

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