Recently, Thailand has approved a draft requiring foreign digital service providers to pay value-added tax (VAT). This is the latest country in Southeast Asia looking to increase tax revenues from foreign technology companies.
If the draft is approved by parliament, revenue from Apple’s App Store and Apple Music and other services in the Thai market will have to be shared for the country.
Last month, Indonesia passed a law requiring Internet companies doing business in the country to pay VAT for digital products and services from July 2020. Or in the Philippines, a legislator introduced a similar bill to tax digital services.
Of course the bill in Thailand still needs to be approved by the country’s parliament. If approved, foreign companies or platforms that earn more than US $ 58,000 a year from providing digital services in Thailand will have to refund 7% VAT.
The Thai government is seeking to level the playing field and create fairness for both domestic and foreign companies.
VAT is simply understood as sales tax and is usually paid by consumers. However, Apple’s approach to VAT is not to increase the price to compensate, but to bear the cost through the support of shareholders.
Currently, France and the UK are also seeking to collect VAT from digital technology providers. However, most countries are waiting for the launch of the OECD initiative to establish a consistent tax rule in 137 countries.
The initiative will force Apple and other tech giants to pay taxes in each country where they sell products and services in the future.
As such, Apple will not be able to split profits from all Apple Stores in Europe through Ireland’s tax policy flaw as a trick to tax evasion in other countries.
Refer to 9to5mac