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Discussion of E-commerce and Taxation in Thailand and the USA

Transcript of the above video:

As the title to this video suggests we are discussing taxation in the context of E-commerce specifically with respect to the jurisdictions of the United States and Thailand.

Some would probably question why are we specifically discussing such a narrow topic with respect to those two specific jurisdictions? Well as an American born Thai person I can say that for me they are of specific interest and also there have been some recent coincidences with respect to the notion of E-commerce tax that I think are noteworthy.

Let's start with a quotation from Reuters, that is reuters.com, and the title of the article is “Supreme Court lets States Force Online Retailers to Collect Sales Tax”.  Quoting directly “States may force online retailers to collect potentially billions of dollars in sales taxes, the U.S. Supreme Court said in a major ruling on Thursday that undercut an advantage many e-commerce companies have enjoyed over brick-and-mortar rivals." Quoting further, " In a 5-4 ruling reviving a South Dakota law challenged by Mayfair Inc, Overstock.com Inc. and Newegg Inc, the Justices overturned a 1992 high court precedent that had barred states from requiring businesses with no “physical presence” there, like out-of-state online retailers, to collect sales taxes.”

There is this whole notion that has nebulously been forming in the e-commerce space with respect to the notion of sort of the nexus of commerce. How do we collect tax? How do these state jurisdictions, federal jurisdiction, any jurisdiction, collect tax in online transactions where the existence is almost esoteric; it is all occurring in the ether as it were. But that said, the Supreme Court has made it abundantly clear that they are changing their tactics with respect to how they view taxation and commerce. I think it is interesting. It was a 1992 ruling. I think it is just a totally different world now. It is 2018. Yes there was e-commerce back in 1992 but it was not what it is now where Amazon is quite literally bulldozing Walmart in many ways. That is neither here nor there, if is neither good nor bad. It simply is what it is. There is just a great deal more e-commerce happening, particularly in the United States. 

Now what I find interesting is the Thai Authorities are taking very similar measures here in the Kingdom. As noted in a prior video on this channel, I discussed the fact that Thai authorities are basically taking steps to tax those offshore businesses that operate here in the Kingdom or that sell in the Kingdom. They are going to start requiring them to go ahead and collect VAT and pay it with respect to those transactions that occur here in the Kingdom;  very, very similar to this ruling from the Supreme Court in the United States. I think the same logic kind of applies. Look if you are selling something in a given jurisdiction they are going to be able to tax you on it, they are going to be able to hit you for sales tax or in the case of Thailand VAT which operates very much like a sales tax. In fact I think in other jurisdictions I think it is actually referred to as a General Sales Tax as opposed to VAT.

But the thing to take away from this video is "times they are a-changing". It is 2018 now. I think those online retailers, big and small, are going to have to deal more and more with taxation of that transactions and basically have probably more costs associated with accounting account filing etc. both here in Thailand and in the United States.