With effect from 1 September 2021, Thailand will impose value-added tax (“VAT”) liability on foreign digital service providers with an aim to level the playing field between domestic and foreign online operators. Key takeaways from this notable change can be summarized as follows:

Key proposed changes under the Draft Amendment are as follows:

1. Overseas operator who provides an e-service  (including online downloading of games, music or movies, stickers sale in chat applications, streaming services, and advertising services on webspace or applications and etc.) from outside Thailand to users in Thailand who are non-VAT registrant (B2C transactions) shall: (i) register online for VAT in Thailand if the annual turnover from provision of the e-service¹ exceeds Baht 1.8 million; and (ii) file VAT returns and pay VAT on a monthly basis, without offsetting any input tax.
2. In case where the e-service is provided through an e-platform², which continually supports the offering, delivery, and payment of the e-service, including other processes as may be prescribed by the Director-General of Revenue Department, the e-platform operator shall be responsible for registering, filing return and remitting VAT in aggregate sum for all relevant overseas e-service providers without being required to provide a breakdown of service provided by each operator. 
3. In this connection, it is worth noting that e-service and e-platform providers are not allowed to issue tax invoices to their users in Thailand who are non-VAT registrant.
4. Administration of the VAT registration, returns filing and payment of VAT will be managed through a Simplified VAT System for the e-service to be implemented by the Revenue Department.
5. Notwithstanding the foregoing, provision of the e-service by overseas operator to VAT-registered customers in Thailand (B2B transactions) will continue to be subject to the standard reverse charge basis.

¹ “e-service” is defined 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.
² “e-platform” is defined as a market, channel, or any other process or method that multiple service providers can use to provide e-services.
 

^{This document is solely intended to provide an update on recent development in Thailand legislation and is not purported to provide a legal opinion, nor a legal advice to any person.}