The Royal Gazette has published a law to collect 'E-Service' tax from foreign service providers such as 'Facebook, Google, YouTube, Netflix, etc.' The Director-General of the Revenue Department indicated that the tax collection will take effect in 180 days. The department expects to generate an additional 5 billion baht starting from the fiscal year 2021 and is in discussions with operators to establish the simplest tax payment system.

          On February 10, 2021, the Royal Gazette published the Act Amending the Revenue Code (No. 53) B.E. 2567, which will impose value-added tax (VAT) on foreign service providers for electronic services generating income in Thailand. The law will take effect the day after its announcement in the Royal Gazette, except for provisions that amend the collection or payment of VAT, which will apply to income or payments starting from the first day of the seventh month following the month of the announcement in the Royal Gazette, or in another six months.

         Mr. Aekniti Nitithanprapas, Director-General of the Revenue Department stated that the department is currently in discussions with various operators to create the easiest tax payment system. After the law is published in the Royal Gazette, there will be an additional 180 days before tax collection begins. The department anticipates that in the last quarter of the fiscal year 2021, revenue from this tax will be generated before September, estimated at 5 billion baht, due to the significant increase in consumer behavior using foreign online platforms.

        The collection of VAT from foreign digital platforms is a priority for tax authorities worldwide as they aim to create fairness for domestic operators who are subject to tax. Currently, over 60 countries have implemented similar laws, including the United States, the United Kingdom, Malaysia, Indonesia, South Korea, Japan, and Australia.

        This law imposes VAT on foreign service providers offering e-services in Thailand, such as Facebook, Google, YouTube, Netflix, as well as providers of downloadable games, apps, and stickers. The tax will be collected at a rate of 7% per year. The method of tax payment for foreign electronic service providers will be based on 'sales tax' without allowing input tax deductions. Furthermore, in cases where electronic service providers operate through platforms, and the platform acts as the service deliverer, the responsibility for tax payment lies with the platform. The department is confident that major multinational service providers are ready to pay this tax.