Treasury Implements VAT Collection on Imported Goods

Order the Value Added Tax (VAT) to be collected on products worth less than 1,500 baht. Assign the platform to be the one to remit the tax. The draft law is expected to be enforced within.

Mr. Chulaphan Amornvivat, Deputy Minister of Finance, revealed news after today’s Cabinet meeting (April 2, 2024). The Revenue Department and the Ministry of Finance will draft laws for collecting Value Added Tax (VAT) on imported goods. They will not exempt products with a value of less than 1,500 baht to solve problems and bring fairness to small and micro entrepreneurs in the country.

New Draft Law to Address Fairness for Small Entrepreneurs

In the past, according to international trade agreements, the rules for cross-border shipping for products with a value of less than 1,500 baht were exempt from import duties and VAT to facilitate trade.

“Drafting related laws is underway. Officials believe that they will start collecting VAT taxes no later than. This will occur through online platforms that import products from abroad. To establish a fair trade atmosphere, all business operators must pay VAT at the same rate. This applies to both domestic and foreign operators.”

Details of the VAT Collection Mechanism

Mr. Chulapan further stated that the Prime Minister assigned the said mechanism as a mission. Let’s go take action. He emphasized that in the next 2 months, we believe there will be a trade and investment atmosphere. It will be standard and fair to all parties.

Government’s Expectations and Revenue Projections

The government estimates that collecting Value Added Tax on imported goods valued at less than 1,500 baht will generate approximately 18,000 million baht per year. Initially, the government expects to collect approximately 100 million baht in revenue. More importantly, this will create fairness for SME entrepreneurs in the country.

International Cooperation in Tax Collection

The upcoming law will rely on international agreements for enforcement. The tax collection mechanism of the Organization for International Economic Cooperation and Development (OECD) collects value-added tax through the platform. This Vendor Collection Model allows the platform to deliver the tax to the government. This mechanism has begun to be rolled out worldwide to facilitate the expansion of e-commerce.