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August 6, 2021

Thailandís application of VAT on digital services (e-services) provided by foreign operators will apply as of 1 September 2021

Executive summary

Initially proposed four years ago, Thailand’s new Value Added Tax (VAT) rule for nonresident providers of electronic or digital services (so-callede-services” under Thai law) to non-VAT registrants in Thailand was passed into law in February 2021 and will apply from 1 September 2021.

The rule is broadly similar in concept (taxing supplies of digital services by nonresidents) to the rules introduced in Singapore (Goods and Services Tax or GST), Malaysia (Services Tax) and Indonesia (VAT) in 2020. However, it is important to note that the rules and how they are being applied in practice is different in each jurisdiction.

Its principal objective is to generate additional tax revenue and to create a level playing field for Thai-based providers of e-services.

Detailed discussion


From 1 September 2021:

  • Non-Thai individuals or corporations or those otherwise providing e-services (see definitions below) from overseas to non-VAT registrants in Thailand may be required to register for Thai VAT (see exclusions below).
  • If all customers are VAT-registered companies, foreign operators won’t be directly affected.
  • Individual or non-VAT registered business entities resident in Thailand that purchase e-services from an operator overseas may see 7% Thai VAT added to invoices when billed by foreign operators.

Definitions of e-services and e-service platform operators

Examples of e-services are online games, movie and music streaming services, mobile application services, online advertising services, online software sales or licensing, web hosting or any other services that are delivered over the Internet or through another, essentially automated electronic network that could not be successfully provided if such technologies were not available.

Non-Thai e-platform operators who act as intermediaries for multiple non-Thai e-service providers are also required to register for Thai VAT, but only if they: (i) offer a complete suite of e-services, from presentation to delivery to payment collection; (ii) receive payment for e-services; and (iii) deliver the e-services on behalf of nonresident e-service providers.

If any of these three criteria are not met, an e-platform operator is not required to register as such for VAT purposes. This means that, for example, some online gaming platforms do not need to register as they may either not collect payment nor deliver services to the end-users and therefore do not meet criteria (ii) or (iii), respectively. However, digital platform operators who do not meet all these criteria still need to consider whether they should register as non-Thai e-service providers.


Not every nonresident e-service provider and e-platform operator will be affected. Some e-services are excluded from this new e-service VAT rule, including telecommunications, online payment or live teaching services and sales of e-books or e-magazines. The examples given by the authorities are not exhaustive, however, certain online service providers will need to seek specific advice to ensure they are excluded.

Moreover, only those with income of more than THB1.8 million annually (approx. US$60,000) from providing e-services to non-VAT registrant customers in Thailand will be required to register for VAT, file monthly VAT returns and pay VAT. And unlike Thai-based operators, non-resident operators are neither required to issue a tax invoice to Thai customers nor keep an input tax report.

Identifying customers

Interestingly, although this new VAT rule is aimed at collecting VAT on e-service consumption by business to consumers, the way it is written emphasizes collection of VAT on e-services provided to non-VAT registrant customers. In fact, some corporate customers are not VAT registrants because they operate VAT-exempt businesses, while individual customers could be VAT registrants if their revenue from carrying out VAT business in Thailand reaches the relevant VAT threshold.

As a result, it will be important for non-Thai e-service providers and e-platform operators to identify the VAT profile of their customers.

Relying on self-declaration by customers is acceptable but operators should at least inquire, and preferably check. VAT registration status can be checked on the Revenue Department’s website by entering the 13-digit (tax, personal or business) ID of the customer.

To determine whether a customer is purchasing an e-service for use in Thailand, operators can rely on credit card information, billing address and access information like the mobile country code or IP address.

Implementation of new VAT rule for foreign and Thai e-service providers after 1 September

One of the key drivers of this new VAT rule is to level the playing field for Thai and foreign e-service providers and e-platform operators.


Foreign e-service providers and platform operators

Existing Thai e-service providers and platform operators

Revenue threshold

THB1.8 million annually

THB1.8 million annually

VAT registration process

Simplified VAT system for e-services (SVE) via Thai Revenue Department’s website

Standard requirements

Tax invoices

Not required


Input tax

Not recoverable


Input tax report

Not required


Output tax report



VAT filing and payment

Monthly basis

Monthly basis

Permanent establishment (PE) and income tax

No PE and no income tax


Penalties and fines for non-compliance

Fully applicable

Fully applicable

For more information in English, a translation of guidelines issued by the Revenue Department can be downloaded from the department’s website at:


For additional information with respect to this Alert, please contact the following:

EY Corporate Services Limited, Indirect Tax, Bangkok


The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.


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