BANGKOK – Thailand’s Revenue Department has taken steps to amend laws to allow it to tax overseas operators that make transactions in Thailand in an effort to extend the tax base to fast-growing online businesses.
The amendment is necessary as the existing laws only permit the department to impose taxes on companies located in Thailand, while foreign commerce operators are not taxed for cross-border transactions, Prasong Poontaneat told the Bangkok Post.
The Revenue Department will try to complete the amendments within this government, he said.
He cited Agoda, an online hotel reservation company, as an example. When a traveller books hotel in Thailand through Agoda, payment is made to Agoda instead of the hotel, and cannot be taxed as Agoda is located overseas.
The amended law will also be extended to payments made through Apply Pay, Ali Pay, V Chat Pay, financial technology (fintech) firms, and bitcoin payments.
“We don’t want to ruin the e-commerce system, but we would like to provide grounds for fair taxation,” said Mr Prasong.
Many newer businesses operate on online platforms, and 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.
The 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.
Approval to participate will soon be sought from the cabinet, Mr Prasong added.
BY WICHIT CHANTANUSORNSIRI |Â BANGKOK POST