On February 10, 2021, the Act Amending the Revenue Code (No.53) B.E. 2564 (2021) was published in the Thai Government Gazette, amending and introducing new provisions under the Revenue Code with respect to value added tax (VAT) on services provided online (sometimes called e-Services—see definition below). The act will come into effect on September 1, 2021.

The key elements of the act are as follows.

Definitions of e-Services, e-Platforms, and Goods

The act defines an “e-Service” as “a service that includes incorporeal property delivered through the internet or other electronic means, where the service is, in essence, performed automatically, and where the service cannot be performed without information technology”.

The act also defines an “e-Platform” as “a market, channel, or any other process or method that multiple service providers can use to provide e-Services.”

The act amends the definition of “Goods” for VAT purposes to explicitly exclude “e-Services.” Once the act takes effect, the definition of “Goods” will therefore be “corporeal and incorporeal property susceptible to having a value, and of being appropriated, whether or not for sale, use, or any purposes, and shall include every imported item, but shall not include incorporeal property that is delivered through internet system or other electronics means” (italics denote new wording added to the Revenue Code by the act).

E-Service Providers and e-Platform Operators Will Be Subject to VAT

Business operators providing e-Services from abroad and used in Thailand by users who are not VAT registrants will now be required to register for VAT, and will be liable to pay VAT without deducting any output tax (VAT pay-only). A VAT return must be filed, and the corresponding VAT must be paid, on a monthly basis.

If business operators provide e-Services through an e-Platform, which supports the continual process from service proposal, service payment, service delivery, and other processes (to be prescribed by the Director-General of Revenue Department), the operator of the e-Platform shall be liable to pay VAT on behalf of every foreign provider of e-Services, without the need to separate the details of each service provided by each provider. The duty and liability of an e-Platform operator will be the same as that of the foreign provider of e-Services.

E-Service and e-Platform providers are prohibited from issuing tax invoices to their users.

The methods by which foreign e-Service providers and e-Platform operators must register for VAT, file VAT returns, and pay VAT under this new act are yet to be prescribed.

Electronic Communication Between the Revenue Department and Taxpayers

Communication between the Revenue Department and taxpayers, including summonses, tax assessment letters, forms, tax invoices, reports, documents, and any other letters that must be prepared or used in accordance with the Revenue Code, can now be done electronically.

The criteria and methods for electronic communications are yet to be prescribed by ministerial regulations. When such regulations are released, they will be in line with the law concerning electronic transactions.

Any notification issued under the current law (which does not allow communication via electronic means) will continue to be in effect only to the extent that it does not contradict with the new law.

Other matters

Provisions which are repealed or amended by this act will continue to be in effect on tax collection that is already due, or will become due, for income or expenses that occurred before September 1, 2021.