Online payment taxes coming soon

When tourists book hotel rooms in Thailand the overseas company they pay cannot be taxed in Thailand. This may soon change.

TAXES

Online payment taxes coming soon

24/10/2016
Wichit Chantanusornsiri

Taxes on overseas online businesses that make transactions in Thailand will be included in new tax laws soon.

Like many countries around the world, Thailand is working on amendments to laws that extend the tax base to fast-growing online businesses.

Existing laws only permit taxes to be imposed on companies located in Thailand.

Foreign businesses are not taxed for cross-border transactions.

TYPICAL ONLINE PAYMENT: HOTEL RESERVATIONS 

Take for an example Agoda, an online hotel reservation company.

Agoda cannot be taxed as Agoda is located overseas.

The amended law will also be extended to online payments made through Apply Pay, Ali Pay, V Chat Pay, financial tecnology (fintech) firms, and bitcoin payments.

DON'T WANT TO RUIN E-COMMERCE

"We don't want to ruin the e-commerce system, but we would like to provide grounds for fair taxation," said Mr Prasong Poontaneat of the Revenue Department which is in charge of tax collection for the government.

Many newer businesses operate on online platforms.

The Revenue Department having monitored tax payments of online and e-commerce operators over the past two years, has found that only 2,000 digital commerce operators are in the formal tax system.

The country's largest tax-collection agency gathers a mere 300 million baht from online operators.

WORLDWIDE EFFORTS TO TAX ONLINE TRANSACTIONS

The Revenue Department is studying the taxation of online operators in several countries, including India, where they are taxed at 6% of sales income.

Worldwide governments are facing legal obstacles in their attempts to tax online operators, Mr Prasong said, adding that a number of countries, including the UK, Japan, Australia and Italy are examining possible methods that would allow them to do so.

To boost tax collection efficiency, there is an effort from several countries to standardise taxation and Thailand plans to join the group, he said.

Thailand is planning to participate in these standards.

http://www.bangkokpost.com/business/news/1117913/overseas-online-operators-see-the-taxman-cometh

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