Thailand’s Ministry of Finance has announced that it should impose value-added tax (VAT) on low-value imported goods purchased directly by overseas consumers. This policy shall be valid from July 5 to December 31, 2024.
Previously, imported goods value lower than 1,500 baht were exempt from VAT. Under the brand new rules, VAT shall be added at the web checkout and sellers can have to register for VAT, submit reports and make tax payments.
The registration process shall be simplified with no threshold. If sellers don’t register, payment service providers (e.g. bank card issuers) shall be obliged to withhold VAT.
After December, recent regulations shall be introduced that can allow the tax office to proceed collecting VAT on these products.
This policy goals to create a level playing field for local businesses and increase tax revenues. Previously, there have been discrepancies between foreign and domestic sellers regarding tax obligations. E-commerce sellers based in Thailand needed to charge VAT on all sales, while Chinese sellers could reap the benefits of existing import thresholds.
Additionally, this policy is consistent with international agreements that set minimum thresholds for the worth of imported goods which are to be subject to tariffs.
This declaration, referring to art. 12 of the Customs Tariff Act of 1987, was approved by the Council of Ministers on June 4 and covers three principal areas.
