Thailand VAT on digital services Sept 2021

Thailand has confirmed the implementation of 7% VAT on non-resident providers of digital or electronic services from 1 September 2021. The liability to charge and collect VAT will apply to non-resident providers and marketplaces for the first time - resident providers are already liable. The measure was proposed by the government in 2020, and approved by Parliament this week.

There will be a simplified VAT registration process for foreign taxpayers, which will only allow for declaring sales VAT and will offer no right to deduct any local VAT incurred. There will be no requirement to issue sales invoices. There will be a VAT registration threshold of 1.8m Baht (over €60,000) per annum.

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The measure could raise 3b Baht (over €80 million) for the Revenue Department. It will include services such as streaming or download media and apps. But also advertising services on social platforms. 

It follows similar recent announcements by the Philippines and Indonesia. Mexico and Chile are imposing the same consumption tax requirements on non-residents.