United States

Thailand’s value-added tax for electronically supplied services

Thailand is the only southeast Asian country not colonized by a European country. Fittingly, the Thai language, Prathet Thai, means “land of the free.”

The following content was reviewed and updated as of Jan. 8, 2019.

Legislative effective date

Jan. 1, 1992

Name of tax

Value-added tax (VAT)

Statute of limitation

5 years

In the event of an unfiled return or underpayment of tax (by greater than 25 percent), the statute of limitations is 10 years.

Standard rate of VAT

7 percent

Electronic supplies

There is no specific definition covering electronic services and so a general approach should be taken. To this end, services are defined in the normal way as any supply made for a consideration that is not a supply of goods. To the extent the service is provided digitally, it is an electronic service.

Registration

Any person or entity that provides services in Thailand and has an annual turnover exceeding 1.8 million baht (approximately $57,000 U.S. dollars) is required to register for VAT.

In addition to VAT registration, a supplier of electronic services in Thailand is also required to obtain a commercial registration certificate.

However, nonresident suppliers of electronic services, where the service is used in Thailand, are not required to register for VAT.

Business customers of services supplied from outside Thailand are required to account for Thai VAT under the reverse charge rule.

Customer identification

There is no need to distinguish customer type as all domestic customers supplied by domestic service providers will be charged VAT, whereas customers supplied by nonresident suppliers will not be charged VAT. 

VAT registered customers supplied services from a nonresident supplier without VAT are required to self-assess VAT under the reverse charge rule.

Customer location

Digital services rendered by a Thailand VAT registered business are not subject to VAT if the services are wholly used abroad.  However, in the absence of evidence to prove the place of use of a service, the customer’s address could define the place of supply.

Supplier identification

A nonresident supplier of taxable electronic services can be a business, a government body or an individual.  There are no exemptions for particular suppliers.

Procedural matters

VAT is paid monthly within 15 days of the end of the month.

Failure to file a return risks a penalty of up to 200 percent of the tax owed and a surcharge of 1.5 percent per month.

Historic transactions

Penalties and surcharges of up to 200 percent of unpaid or misstated VAT liability are assessed for various reasons, including but not limited to the following:

  • Late or nonfiling of VAT return
  • Failure to apply for registration
  • Late or nonpayment of tax liability

How can we help you with international tax concerns?


Subscribe to Tax Insights