ASIA: Govt accord set to tackle tax evasion.

As published on bangkokpost.com, Monday 15 June, 2020.

The Revenue Department has signed an agreement on mutual tax cooperation with 160 countries -- a move that will enable Thailand to tackle tax evasion by foreign e-service providers.

Ekniti Nitithanprapas, the department's director-general, said by signing the Convention on Mutual Administrative Assistance in Tax Matters, Thailand can request information about registered companies for tax evaluation if they operate digital platforms in Thailand.

The agreement, which is aimed at facilitating international co-operation to ensure better application of national tax laws, will plug loopholes that may arise after the enforcement of a bill amending the Revenue Code.

The Finance Ministry has proposed the amendment seeking to collect value-added taxes from foreign e-service providers. The bill, which was recently approved by the cabinet, will be submitted to the House.

Under the bill, digital platform operators providing services that earn more than 1.8 million baht a year providing digital services in Thailand will be required for VAT payment.

Authorities believe adding foreign digital players to the VAT regime would add 3 billion baht to state coffers per year. "Before the bill was tabled to the cabinet, the Council of State raised concerns as to what the department would do if the foreign e-service providers don't comply with the amended law," he said.

"What instruments does the department have to collect taxes? Several countries face non-compliance from foreign e-service providers even though they have the laws." He said signatories include Japan, France, Germany and Australia.

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