VAT collection on low-value imported goods
At the cabinet meeting on 2 April 2024, the Prime Minister directed the policy to the Ministry of Finance to urgently proceed with the measures regarding the Value-Added Tax (VAT) collection from the import of goods valued at less than Baht 1,500 per parcel to strengthen fairness for goods sold and/or produced by domestic Small and Medium-Sized Enterprises (SMEs) and also enhance and facilitate trade competition in the domestic market.
The government has its policy to reduce unfair trade between international and domestic enterprises. Currently, international enterprises are exempt from VAT for their imported goods to Thailand. This creates a huge differentiation between the price of goods imported from overseas and those produced locally in the market. As a result, the Ministry of Finance has its plan to enact legislation requiring online platform traders in Thailand and overseas to register with the Revenue Department in order to collect VAT at the rate of 7% for the sales of imported low-value goods to the local market and also require them to submit its VAT submission form to the Revenue Department on a monthly basis, similar to those of local trade businesses.
The Deputy Minister of Finance stated that the Revenue Department will submit a draft legislation in May 2024 to the Cabinet for its consideration. In the meantime, the Ministry of Finance will implement measures to collect taxes on low-value goods through Thai Customs.
Author: Panisa Suwanmatajarn, Managing Partner.
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