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Cabinet nod for proposal to collect VAT from foreign e-commerce vendors, Internet platforms

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Cabinet nod for proposal to collect VAT from foreign e-commerce vendors, Internet platforms

By The Nation

 

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The Cabinet on Tuesday gave a green light to collect 7-per-cent value added tax from foreign vendors and e-commerce platforms, Government Spokesman Maj-General Sansern Kaewkamnerd said.

 

The VAT will be applied to both those who sell goods and services on Internet platforms and those who operate such platforms, such as Google, Amazon and Alibaba. 

 

Under the draft bill, foreign businesses in the two groups will have to register their tax compliance with the Revenue Department, the spokesman said.

 

The government will now forward the draft bill to the Council of State – the government’s legal advisory body – after which it will be submitted to the National Legislative Assembly for debate, Sansern added.

 

Source: http://www.nationmultimedia.com/detail/business/30350256

 
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-- © Copyright The Nation 2018-7-17

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How would that then work? I doubt the trinket salesman on eBay from Hong Kong cares, or even eBay itself.

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I think some clarification is in order.

This VAT charge is applicable only to international parcels shipped from overseas, into Thailand.


Local domains of international sites e.g. Lazada, charge VAT on each invoice.

 

Either customs itself will be responsible for VAT collection (don't know how that's gonna work)

or they will try to adopt a vendor collection model and pass the buck to the e-commerce platform.

 

This idiocy will only lead to one end result - all these additional costs will get passed on the customer.

 

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Australia has introduced a similar scheme.  You can only buy from Amazon Australia site now for example.  The overseas sites are blocked by Amazon not the government. 

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That's correct, it's called the low-value GST. 

 

However, I don't think that the Amazon global sites are geo-blocked in Australia.

Australian customers just can't choose an Australian shipping address.

 

There are workarounds like using a parcel forwarding service with a US-based address.

 

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On 7/18/2018 at 8:55 AM, varun said:

I think some clarification is in order.

This VAT charge is applicable only to international parcels shipped from overseas, into Thailand.


Local domains of international sites e.g. Lazada, charge VAT on each invoice.

 

Either customs itself will be responsible for VAT collection (don't know how that's gonna work)

or they will try to adopt a vendor collection model and pass the buck to the e-commerce platform.

 

This idiocy will only lead to one end result - all these additional costs will get passed on the customer.

  

It already works like this in Europe for digital services, if you buy something from a country in US or Europe you will get the VAT tariff of your home country.  So its nothing new its not that hard to do but the big players have to help of course.

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1 hour ago, robblok said:

It already works like this in Europe for digital services, if you buy something from a country in US or Europe you will get the VAT tariff of your home country.  So its nothing new its not that hard to do but the big players have to help of course.

I think you've missed the point.

This regulation is fairly new when you're talking in terms of B2C e-commerce i.e.

goods bought on an online platform and then shipped via courier (parcel) across international borders. 

 

Digital services is something else entirely.

As an example, prior to the start of 'Amazon Tax',  international parcels up to a value of AUD 1000 were exempt from taxation in Australia, upon importation.

When you purchase the aforementioned goods, you are not charged VAT on the commercial invoice.

 

Similarly, postal parcels received into Thailand with a (assessed) value of <1000 baht are exempt from duty and taxes.

You don't pay any VAT on these parcels, do you?


This is potentially lost revenue that the govts are chasing after.

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4 minutes ago, varun said:

I think you've missed the point.

This regulation is fairly new when you're talking in terms of B2C e-commerce i.e.

goods bought on an online platform and then shipped via courier (parcel) across international borders. 

 

Digital services is something else entirely.

As an example, prior to the start of 'Amazon Tax',  international parcels up to a value of AUD 1000 were exempt from taxation in Australia, upon importation.

When you purchase the aforementioned goods, you are not charged VAT on the commercial invoice.

 

Similarly, postal parcels received into Thailand with a (assessed) value of <1000 baht are exempt from duty and taxes.

You don't pay any VAT on these parcels, do you?


This is potentially lost revenue that the govts are chasing after.

I did not miss the point, just explained that it was normal for governments to go after taxes for products bought in their country. I seen it in Europe too. I am a tax accountant so i work with these rules. A client of mine is a Swedish company but they pay Dutch VAT for all the parcels they ship to the Netherlands because they sell more then a certain limit (200k turnover per year). Of course on those parcels there is no Swedish VAT. Just showing its not just a Thai thing. But your right i should not have mentioned digital services. But that was just a recent change. 

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3 hours ago, robblok said:

I did not miss the point, just explained that it was normal for governments to go after taxes for products bought in their country. I seen it in Europe too. I am a tax accountant so i work with these rules. A client of mine is a Swedish company but they pay Dutch VAT for all the parcels they ship to the Netherlands because they sell more then a certain limit (200k turnover per year). Of course on those parcels there is no Swedish VAT. Just showing its not just a Thai thing. But your right i should not have mentioned digital services. But that was just a recent change. 

Correct.

However, I should point out that cross border e-commerce in Europe is very different to the rest of the world.


Goods shipped with the "European Union" are in 'free circulation', so there is no need for payment of any duties when the goods (parcels) move within the "European Union" member states.

The payment of duties happens when the original importer is importing the goods (consignment) into a member state in the EU (from a third-country)

 

Of course, there is VAT to pay in the manner as you described
Since VAT is a destination-based tax, this why the seller (Swedish company) charges Dutch VAT for parcels shipped to the buyer (in the Netherlands).


One special case is when the goods are shipped from a "European Union" country to a non "European Union" country within Europe e.g. Norway or Switzerland.

In this case, assuming the same seller (Swedish company) , it will not charge the buyer in Norway any VAT, since this is an export outside the "European Union".

However, once the parcel arrives in in Norway, the buyer may need to pay import duty on the parcel and will possibly be charged Norway VAT by the local customs.

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55 minutes ago, varun said:

Correct.

However, I should point out that cross border e-commerce in Europe is very different to the rest of the world.


Goods shipped with the "European Union" are in 'free circulation', so there is no need for payment of any duties when the goods (parcels) move within the "European Union" member states.

The payment of duties happens when the original importer is importing the goods (consignment) into a member state in the EU (from a third-country)

 

Of course, there is VAT to pay in the manner as you described
Since VAT is a destination-based tax, this why the seller (Swedish company) charges Dutch VAT for parcels shipped to the buyer (in the Netherlands).


One special case is when the goods are shipped from a "European Union" country to a non "European Union" country within Europe e.g. Norway or Switzerland.

In this case, assuming the same seller (Swedish company) , it will not charge the buyer in Norway any VAT, since this is an export outside the "European Union".

However, once the parcel arrives in in Norway, the buyer may need to pay import duty on the parcel and will possibly be charged Norway VAT by the local customs.

There are exceptions to the rules but your right in what your saying. Anyway i just mentioned it because some people think its a money grab from the Thai government (in a way it is) but not so much different from other countries. 

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That's why I never buy online in Thailand, because besides that, the internet connection is unstable and unreliable. If connection interrupted during the payment process (panic-panic-clicky clicky click,....) you get what I mean??? :giggle:

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Paying VAT would and should allow every individual access to work permits, unless they won't be needed thanks to the new work permit laws. It should also allow access to simpler VISA's or am I taking my hopes a bit far?  

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