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3 tax matters that Thai e-commerce people must know

泰国税务

The process of industrial digitization continues to accelerate globally, and the era of transformation of the digital economy has arrived. Sweeping by the wave of digitalization, Thailand is transforming in the ever-changing digital world and is committed to continuing to develop the digital industry to achieve a digital industry that contributes more than 30% to the national economy and to rank Thailand among the top in the world's digital competitiveness rankings. The ambitious goal of 30th place.

Thailand proposed the concept of "Digital Thailand" in February 2015, and subsequently introduced relevant development plans. It is one of the earliest members of ASEAN to focus on digital transformation and digital economic development. In recent years, Thailand has attached great importance to digital transformation and adopted a series of policy measures to promote the development of the digital economy, which has achieved remarkable results.

​​​​Thailand has a good foundation for the development of the digital industry. First, Thailand has a high Internet penetration rate. As of January 2023, Thailand had 61.21 million Internet users, and the Internet penetration rate reached 85.3% of the total population. A large proportion of national digital technology usage and acceptance means that Thailand’s digital industry has huge opportunities and high-potential investment opportunities.

But for those who run an e-commerce business or are interested in starting an e-commerce business, there are often many issues surrounding taxation. For example, when we run a business, what kind of taxes should we pay and how to pay them? This is a question I often get asked on my fan page! Divided into the following 3 questions.

1. Is e-commerce business income taxable?

The answer is yes, we must pay, business income must pay taxes, in order to operate the business for a long time, it is not only for profit, but also for social responsibility!

2. Can I not pay tax?

Of course not, because once an enterprise is identified as a tax evasion enterprise, it will face the payment of fines and interest penalties, that is, "fines and surcharges". These fines and surcharges will be paid at different tax rates according to the type of tax. Therefore, tax compliance issues cannot be underestimated!

When our annual e-commerce business revenue exceeds THB 1,800,000, you are obliged to register as a VAT registered entrepreneur and have the responsibility to prepare sales tax reports. Input tax return and value-added tax return, declare and pay taxes.

For those voices who tell you that you can do it secretly and don’t have to pay taxes. I suggest you not to take this risk. The Thai Taxation Bureau has issued a press release stating that if you want to evade taxes, the Thai Taxation Bureau will monitor your company's behavior. Because the tax bureau has mastered the sources of all transaction information, there is no chance to take any chances. Therefore, the editor recommends that you do not avoid taxes and operate legally and compliantly!

3. What taxes do I need to pay and how do I pay them?

After we know that we have to pay taxes, the next question is what taxes we have to pay and how to pay them. Let’s look at it from the perspective of business model and revenue!

Business model

​ Our e-commerce business is conducted in the form of individuals or legal entities. Personal income tax is payable on a net income basis and income is assessed as follows.

Thailand’s personal income tax is calculated based on personal income, and the tax rate is based on the income level.

Thailand’s personal income tax is divided into 7 levels, with tax rates ranging from 0% to 35%. Here’s how to calculate personal income tax in Thailand!

Calculation method:

1. Calculate your annual income. This includes your salary, bonuses, perks, commissions, rental income, etc. Subtract your personal allowance. The personal tax exemption in Thailand is 60,000 baht.

2. Determine your tax bracket based on your income level. Tax brackets range from 0% to 35%.

3. Calculate the personal income tax you need to pay based on your income and tax bracket.

For example, if your annual income is 200,000 baht, after deducting the personal exemption of 60,000 baht, your taxable income is 140,000 baht. According to the Thai personal income tax rate table, your tax bracket is 10%. Therefore, you need to pay personal income tax of 14,000 baht.

It should be noted that personal income tax in Thailand is calculated on an annual basis, and the personal income tax filing period is from March 1 to 31 each year. If your income exceeds THB 150,000, you need to submit a personal income tax return to the Thai Revenue Authority within the filing deadline. If you fail to file an individual income tax return or file a false return, you will face fines and other legal consequences.

Legal person: If you are a legal person (a partnership or company registered in Thailand), you need to pay corporate income tax. The current annual corporate income tax rate in Thailand is 20%

Thailand’s personal income tax calculation method is relatively simple, but you need to pay attention to the filing deadline and tax rate level. If you have any tax questions, you can consult Wellion Business. We have professional tax consultants to answer your Thai tax questions. At the same time, we focus on Thai business, including one-stop services for e-commerce, Thai FDA certification and other services.

Revenue recognition

Another problem is the recognition of the amount of income, because in addition to personal income tax, there is another tax that must be paid, and that is value-added tax.

​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​ You are obliged to register as a VAT registered entrepreneur and prepare output tax returns, input tax returns and VAT returns and pay taxes.

​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​In order to manage tax matters more accurately, we also need to understand and explore ourselves, what kind of business we are engaged in and how much money we make. If you still have questions about taxes and opening a company in Thailand, you can ask us on the official account. We have professional financial consultants to answer your tax questions!

Financial statements are accurate and transparent, and you can pay taxes to the state with peace of mind. Avoid fines and additional fees.

Financial and tax management is the core of an enterprise. If you have questions about finance and taxation related to opening a company in Thailand, you can contact us. Through cloud accounting software, we help you process and pay various taxes and fees, so that account transactions are clearly visible, truly reflecting the business operating status, and helping you make decisions. Provide evidence. Follow us to learn more about Thailand tax business information!

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