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THAILAND: Tax to be Levied on All E-Commerce Transactions Deemed to be Within Thai Jurisdiction

All digital transactions deemed to have been conducted within Thai jurisdiction are set to become taxable under a proposed amendment to the country’s e-Transactions Law. While, at present, only digital service providers with a permanent Thai base are required to pay tax, the new legislation will see the obligation extended to overseas digital service providers, including e-commerce operators and online advertising firms.

Among the companies set to be affected by this new requirement are any overseas digital service providers with a Thai-registered internet domain, any utilising a dedicated Thai Baht payment system and any that require money to be transferred from Thailand in order to complete a transaction. While all such companies will be liable to pay corporate income tax at a rate of 20%, those digital service providers deemed not to have a permanent presence in Thailand will be liable for a withholding tax (WHT) of between 5% and 15%. In the latter instance, the onus will be on the purchaser to deduct the applicable WHT sum prior to paying the service provider in question. The legislation will also oblige global online advertising service providers, including Google and Facebook, to establish legal entities within Thailand for tax purposes.

Although no date has yet been announced for the implementation of the new legislation, the proposed amendments are expected to be approved by the Thai cabinet by the end of next month.  This would pave the way for them to be formally adopted in early 2018.

Content provided by Picture: HKTDC Research
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