Internet Buyers Will Pay Vat By 2015: Thailand

[webfact]

Internet Buyers Will Pay VAT By 2015

The Revenue Department plans to eventually add the VAT (Value Added Tax) to any purchases made via the Internet in Thailand. The decision was made in anticipation of the opening of the ASEAN free market in 2015, which is expected to stimulate commerce among the 10 Asian nations.

BANGKOK – October 22, 2012 [PDN]; the Revenue Department of Thailand announced its intent to add the VAT on any purchases made over Internet in Thailand by the year 2015, when the opening of the ASEAN ECONOMY (AEC) begins.

Presumably the opening of the AEC will stimulate e-commerce also, said Mr. Sathit Rangkasiri, the Director-General of the Revenue Department. The Revenue Department is planning for the new tax collection system to be in accordance with the existing merchandising system and business operations once the AEC begins.

The Revenue Department recognized that if the buying and selling products occurred in Thailand, there should be the payment of the 7% VAT. However, the department cannot collect the VAT from the sellers because they are in foreign countries. So the Revenue Department will collect tax from the buyers in Thailand for both goods and services. Currently the department is studying the most appropriate method for collecting the VAT.

Mr. Sathit said that the Revenue Department confirmed that right now there is no VAT for Internet purchases. But the department will have to adjust their tax collection system and laws for the upcoming AEC agreement, because customers will have right to freely choose to buy services and goods from all 10 ASEAN countries.

If the products from other countries are cheaper and better, and the customers don’t have to pay any taxes, it will cause the foreign products to flow into Thailand a lot. So if the department doesn’t do anything about it, the government will lose all that potential revenue from uncollected taxes, he said.

Full story: http://www.pattayada...ay-vat-by-2015/

-- Pattaya Daily News 2012-10-23

[MaxLee]

That's another way to fill Thailand's VAT greedy regulators pockets, which are already full of enough corruption money. Now the TAT practically tries to suck more money out of tourists...

Anyhow there are still Chatuchak Weekend markets, Panthip, Platinum Mall, Union Mall, where you can buy products cheaper because Internet service in Thailand sucks anyway... So why waste money on a Internet service infrastructure that goes on and off, and on and off anyway...

Smart tourists would never buy online with such a low level Internet broadband infrastructure anyway.

So then, if they tax tourists,... they can still go to cheaper malls or weekend markets mentioned above....

[Thai at Heart]

Bizarre situation.

If you a thai company selling in Thailand, the invoice is meant to have VAT no? If it is imported, someone has to pay duty and VAT to get it into the country? Simple really

[Chicog]

There is no nice way to dress it up. If they are going to try and charge Thai VAT on overseas purchases then they are just a bunch of money-grubbing thieves.

If the products from other countries are cheaper and better, and the customers don’t have to pay any taxes, it will cause the foreign products to flow into Thailand a lot. So if the department doesn’t do anything about it, the government will lose all that potential revenue from uncollected taxes, he said.

It's called Import Duty you daft <deleted>. You already rip people off, remember?

[Gulfsailor]

I think the Director General of the Revenue Department needs some actual economic lessons. He doesnt't understand what VAT means. It means Value Added Tax, so a tax is levied over the added value a good gets, between purchase and sales, or during it creation / manufacturing. What is being proposed here is levying a seperate salestax...

The AEC in economic terms is basically the same as if it were a single country. No duties at any time (except maybe for certian goods such as motorvehicles). Furthermore, the foreign seller will need to add its national VAT rate to any good sold within the AEC. This VAT is received by the seller's country. So yes, if Thai consumers purchase outiside of Thailand, but within the AEC, Thailand will not get VAT. However, if a Thai company sells a good to a consumer outside Thailand, in the AEC, he will have to pay Thai VAT, which the Thai RD collects.

If Thailand is afraid its collected VAT is going to decline, then they should not be in the AEC, or install a Salestax in stead of VAT (Then they would be kicked out of AEC anyway).

In practice though, the current VAT setup in Thialand works much like a salestax. You do not want to know the crap a company will be in, when it tries to claim more paid VAT back, then it is due to pay from actual sales. Yes you can keep a credit, but I think that is only good for 2 years or so.

[GeorgeO]

There is no nice way to dress it up. If they are going to try and charge Thai VAT on overseas purchases then they are just a bunch of money-grubbing thieves.

If the products from other countries are cheaper and better, and the customers don’t have to pay any taxes, it will cause the foreign products to flow into Thailand a lot. So if the department doesn’t do anything about it, the government will lose all that potential revenue from uncollected taxes, he said.

It's called Import Duty you daft <deleted>. You already rip people off, remember?

"IF the products from other countries .... are better......". Well of course they are, but as Chicog says: "you daft <deleted>", producers are required to pay import duty on these superior products, so what grounds do you have to charge additional VAT.

Furthermore, how will you deal with goods that are purchased in Thailand, and then exported to the person's home country, perhaps because that person is on a short-term assignment here? Do you have a system in place to refund this illegally obtained VAT from such tourists?

Edited October 23, 2012 by GeorgeO

[GeorgeO]

I think the Director General of the Revenue Department needs some actual economic lessons. He doesnt't understand what VAT means. It means Value Added Tax, so a tax is levied over the added value a good gets, between purchase and sales, or during it creation / manufacturing. What is being proposed here is levying a seperate salestax...

The AEC in economic terms is basically the same as if it were a single country. No duties at any time (except maybe for certian goods such as motorvehicles). Furthermore, the foreign seller will need to add its national VAT rate to any good sold within the AEC. This VAT is received by the seller's country. So yes, if Thai consumers purchase outiside of Thailand, but within the AEC, Thailand will not get VAT. However, if a Thai company sells a good to a consumer outside Thailand, in the AEC, he will have to pay Thai VAT, which the Thai RD collects.

If Thailand is afraid its collected VAT is going to decline, then they should not be in the AEC, or install a Salestax in stead of VAT (Then they would be kicked out of AEC anyway).

In practice though, the current VAT setup in Thialand works much like a salestax. You do not want to know the crap a company will be in, when it tries to claim more paid VAT back, then it is due to pay from actual sales. Yes you can keep a credit, but I think that is only good for 2 years or so.

I think that Thailand is going to get a message from the other AEC members to the effect that it will not be allowed to levy additional taxes on sales and purchases between countries in what is meant to be a free-trading region.

If it insists on this "VAT", then there will be further discussions on whether Thailand will be allowed to join!

[NHJ]

That's another way to fill Thailand's VAT greedy regulators pockets, which are already full of enough corruption money. Now the TAT practically tries to suck more money out of tourists...

Anyhow there are still Chatuchak Weekend markets, Panthip, Platinum Mall, Union Mall, where you can buy products cheaper because Internet service in Thailand sucks anyway... So why waste money on a Internet service infrastructure that goes on and off, and on and off anyway...

Smart tourists would never buy online with such a low level Internet broadband infrastructure anyway.

So then, if they tax tourists,... they can still go to cheaper malls or weekend markets mentioned above....

do you know there are faster alternative than the edge you seem to be using?

[Rancid]

Lots of the infrastructure bonus bonanza to pay for, money has to come from somewhere. If you are feeling left out open a Mercedes dealership, it is the wave of the future. Huge customer base: politicians, army, police, bureaucrats, all the productuve people of society that add so much to the economy. Either that or a clinic for paper stamping RSI.

[asiawatcher]

If I bank and pay from offshore how will they police that? But for goods coming in this will just be another way for the scammers at Customs, already recognised as the most corrupt of all Govt departments and as already pointed out this is a sales tax not VAT. How they think they will be able to police every sales outlet on internet portals is a little beyond my simple understanding. But please don't elaborate, too much to ponder.

[monty]

Internet Buyers Will Pay VAT By 2015

Full story: http://www.pattayada...ay-vat-by-2015/

-- Pattaya Daily News

2012-10-23

If the products from other countries are cheaper and better, and the customers don’t have to pay any taxes, it will cause the foreign products to flow into Thailand a lot. So if the department doesn’t do anything about it, the government will lose all that potential revenue from uncollected taxes, he said.

Sent from my GT-I9001 using Thaivisa Connect App

It has not much to do with taxes.

The above says it all.

They do realize that a lot of stuff from overseas is simply better in quality, so instead of improving the quality of their own product/service, they try to get rid of the competition.

Has been standard business practice for ages here.