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Value Added Tax (VAT) was introduced into Thailand in 1992 at 10%. Due to the impact of the pandemic, the country reduced its VAT rate from 10% to 7% through September 30, 2023.
The country recently published guidance requiring providers of electronic services — select digital products and services — to register for VAT if they meet certain criteria and thresholds.
In the below article, we’ll walk you through everything you need to know about Thailand’s new VAT requirements for sales of digital products and services.
- Foreign e-services provider requirements
- What are Thailand’s VAT rates for E-Services?
- Do I need to register for VAT in Thailand?
- How to register for VAT in Thailand
- List of possible VAT penalties
New requirements for foreign providers of e-services
On September 1, 2021, Thailand extended its VAT legislation to cover the supply of digital products and services (e-services) provided by non-resident businesses to Thai consumers. Previously, this type of business was not required to register for VAT.
To track compliance with this new regime, Thailand’s Revenue Department is maintaining a public list of non-resident digital businesses that register for VAT.
Thailand recently published a guide that provides information on a host of compliance-related topics such as VAT filing and payment, validation of VAT numbers, and the use of foreign exchange (FX) sources.
There are a few terms included in the guide that is worth defining:
- E-services: Includes non-physical products delivered over the internet or any other electronic network in an automated way that’s impossible to ensure in the absence of IT (i.e. online games, web and mobile applications, software).
- Electronic Platform: Any market, channel, or other procedure that digital service providers use to deliver services to consumers. These platforms are intermediaries between service providers and service recipients and facilitate service transactions.
- Simplified VAT System for E-Service (SVE): The electronic system that Thailand’s Revenue Department offers service providers and electronic platforms to register for VAT, file VAT returns, pay VAT, and request for VAT refund electronically.
You can read more about Thailand’s VAT on Electronic Services in the official guide.
What are Thailand’s VAT rates for E-Services?
Thailand’s VAT system is very similar to the European Union’s system, which requires recalculation and payments to the tax authorities at each transaction point in the sales chain.
| Rate | Type | List of Goods and Services |
|---|---|---|
| 7% | Standard | Online games, music, videos, digital advertising, software, mobile applications, pre-recorded online courses, commission fees to intermediary services, digital images, financial data, web hosting, search engines, on-demand streaming services, listing services, electronic marketplaces |
| 0% | Exempt | Ebooks, live teaching services, payment facilitation, money transfer services, telecommunication services, professional services with human intervention, electronic vouchers |
To calculate your VAT amount, multiply the service value in Thai Baht by the 7% VAT rate.
Learn more on Thailand’s VAT for Electronic Service (VES) via the official Thailand Revenue Department website.
Do I need to register for VAT in Thailand?
If you provide electronic services to a non-VAT registered person, such as a consumer or small unregistered business, you will be required to register for VAT if the taxable services exceed 1.8 million Thai Baht (approximately $55,800 USD) within a calendar year.
Non-resident businesses should register for VAT in Thailand if they meet these criteria:
- Provide e-services, receive payments, and deliver e-services through an electronic platform from abroad.
- The e-service is used in Thailand by a non-VAT registered customer
- Income from the e-service surpasses 1.8 million baht in a calendar year or accounting period.
Refer to the Key Elements section of the guide for more details.
How to register for VAT in Thailand
FastSpring sellers don’t need to worry about registering for VAT or calculating, collecting, or filing taxes in Thailand because we handle it on their behalf.
If you’re not using FastSpring for tax management, we suggest you review the guidance issued by Thailand’s Revenue Department. Here’s some information to point you in the right direction:
- Foreign e-service providers and electronic platforms can register for VAT electronically via the SVE on the Revenue Department’s website.
- VAT registration forms should be submitted separately by each entity. If your business has multiple branches or subsidiaries, each entity that meets the requirements for VAT registration should register separately through SVE.
For more information on VAT registration, read the official VAT for Electronic Services (VES) Registration Guide.
List of possible VAT penalties
Here’s a list of possible penalties your business can face for failing to comply with VAT requirements in Thailand.
Civil Penalties
| Offenses | Penalties/ Fines |
|---|---|
| Conducting business without VAT registration | A fine twice the tax due in tax month for the duration of failure to comply with such provision, or 1,000 Baht per month, whichever is greater |
| Late filing of VAT returns | A fine twice the tax due in a tax month |
| Filing incorrect tax returns affecting the amount of tax due | Fine for the affected amount of tax |
Criminal Penalties
| Offenses | Penalties/ Fines |
|---|---|
| Failure to register for VAT and conducting business without VAT registration | A sentence of no more than 1 month or a fine of no more than 5,000 Baht or both |
| Non-filing of VAT returns | A fine of no more than 2,000 Baht |
| Failing report VAT as prescribed by the Director-General | A sentence of no more than 6 months or a fine of no more than 10,000 Baht or both |
| Intention to evade or try to evade VAT, issuing tax invoice, debit note or credit note without authorization | A sentence from 3 months up to 7 years and a fine from 2,000 Baht up to 200,000 Baht |
Let FastSpring take on your tax liability
Businesses that sell software and digital products can avoid the hassle of managing global tax obligations by signing up with FastSpring. Our intuitive platform handles all of the complexities required to sell products globally on your behalf, so you can focus on building great products and growing your business.
Our tax experts work around the clock to stay up to date on changing tax laws and partner with outside specialists to ensure your business is protected and compliant.
There’s a reason why over 3,500 businesses trust our global tax solution:
- Offloads your tax liabilities
- Automates tax calculation at checkout
- Collects and remits global taxes on your behalf
- Manages the complete VAT compliance process
- Supports tax-exemption on orders
We’re constantly optimizing our tax engine to stay up to date on the latest regulations. Let us take on your tax management needs — sign up for free today!
