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Officials in Thailand Discussing Online Taxation

Transcript of the above video:

In this video today we are going to be discussing, as the title suggests, certain aspects of online taxation that have been bandied about throughout the Thai government in the last few weeks.

A recent article from the Bangkok Post and the title of the article is “E-Business tax targeted to fill coffers” published 8th January, 2018. A member of the Revenue Department has been quoted with respect to issues surrounding revenue. To quote directly from the article here “the Department's tax revenue has increased 5% or 100 billion baht a year on average but that growth pace will be 15% or 300 billion once the e- business tax is once enforced said Prasong Boonthanet the Department's Director-General. Continuing. “The department will conduct a second hearing of the draft E-Business tax this month to measure public opinion before proposing it for cabinet approval. The draft bill requires online vendors to use a domain name in Thailand and have a payment system. (let me go back, excuse me) The draft Bill requires online vendors who are using domain name in Thailand and have payment system in Baht or transfer money from here to pay the tax. So basically, there's a concept that's been brought up a lot in recent years in the United States and I'm not going to get too deep into this because quite frankly I haven't been practicing with in the United States in quite some time, but it's a notion of nexus of commerce. Online purchases, online services they've been kind of a pet peeve I would say of various Revenue Department and Internal Revenue Services around the world because it's very difficult to nail down the money for purposes of getting tax revenue. And for that reason many of these jurisdictions have tried to figure out ways in which to better Tax online transactions. This proposed bill would seem to designate things like credit card processors, payment gateways here in the Kingdom as well as domain names and banking facilities here in in the Kingdom as those seem to be pretty good indicators of a nexus of commerce that's going to become taxable here in the Kingdom. This is all interesting to note because this is stuff that has been sort of nettlesome if you will to regulators in the United States and it's becoming right now to regulators here in the Kingdom because people are trying to figure out how best to go about assessing and enforcing tax collection on online products. It seems to me that they are going to figure out some way to do this. Online products, e-commerce if you will, is only going up in Thailand and I think it stands to reason we are going to see a bit more e-commerce, probably exponentially more e-commerce in the future so, you know, I see why the government is looking for a regime whereby they can tax that Commerce. It just remains to be seen how that regime is going to look.