Electronic invoicing in Thailand is voluntary, but the government regulates it. VAT-liable parties who choose to send e-invoices must report them to the government. E-invoices must be in XML format, digitally signed and timestamped, and sent via the e-Tax Invoice & e-Receipt system.
European countries have been rolling out e-invoicing requirements and reaping benefits like better invoice tracking, time and cost savings, and seamless cross-border transactions.
Asia has not been left behind, as Asian countries have been rolling out digital tax systems that provide for the digital reporting of invoices and withholding tax payments. Thailand is one of the Asian countries with an E-Tax system providing for electronic invoicing.
What exactly are the e-invoicing rules in Thailand, and who needs to comply with them?
This article will answer these questions. At the end of this article, you’ll know what to do to comply with Thai e-invoicing regulations and how to send compliant e-invoices in Thailand.
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What are the e-invoicing rules in Thailand?
Electronic invoicing is not mandatory in Thailand. But, pursuant to its goals to transform Thailand into a digital economy, the government (through the Thai Revenue Department and the Electronic Transactions Development Agency) has been promoting e-invoicing and encouraging parties to make the switch.
The Thai government has rolled out an E-Tax system intended to replace paper-based invoices in many business transactions.
Using the E-Tax system, VAT-liable parties can send e-Tax invoices voluntarily (in an agreed format based on specific business agreements). Electronic tax invoices include credit and debit notes and regular invoices prepared electronically.
When taxpayers choose to exchange electronic invoices with their customers, they must report the e-invoices to the Thai tax office called E-Tax Invoice and Receipt.
Thailand operates two e-invoicing systems, and the one you opt for determines how you report e-invoices to the government. These systems are:
- e-Tax Invoice and e-Receipt (RTIR) system. When using this system, taxpayers who issue electronic invoices must report the invoice to the Thai Revenue Department (in an XML format) by the 15th day of the month following the month of issuance.
- e-Tax Invoice by e-mail system. This system allows taxpayers to report e-invoices to the Thai tax authorities while emailing the invoice to the recipient. Attach the invoice as a PDF/ A-3 file and copy the central system (email@example.com) of the tax office. The email system can be used by only small companies with an annual turnover of less than THB 30 million (about EUR 795,000).
Who needs to comply with the electronic invoicing regulations in Thailand?
Tax-liable parties who deal with any private entity or government agency that requires e-invoices must comply with Thai e-invoicing regulations.
Since e-invoicing is not mandatory in Thailand, the buyer’s consent is required to issue/ send electronic invoices. However, virtually all government agencies, large companies, and most medium-sized companies require electronic invoices.
When you start issuing electronic invoices, you become obligated to report them to the central E-Tax and Receipt system.
Thus, many taxpayers will be unable to avoid using the Thai central e-invoice reporting system. Only businesses dealing with smaller entities that do not rely on e-invoices can avoid issuing these digital invoices or worrying about compliance with the e-invoicing regulations.
Moreso, many small businesses encourage their transacting parties to accept e-invoices, as Thailand’s Revenue Authority has several incentives for taxpayers who adopt the e-Tax system. These include:
- Additional deduction allowances for costs
- Lower withholding tax rate
How to send compliant e-invoices in Thailand?
You can send compliant emails in Thailand in several ways. These include:
- Web portal upload of XML file
- Direct to the tax office
- Appointed e-invoicing agent
- Email in PDF format
Web portal upload of XML file
You can upload electronic invoices as XML files directly to the Thai tax office website. Just ensure the files are compressed and not bigger than 3 MB.
The web upload method is great for small companies with low volumes of data (less than 500,000 invoices per month).
Direct to the tax office (Host to Host)
The host-to-host method for submitting compliant emails requires a direct connection between the taxpayer’s accounting systems and the E-Tax Invoice and Receipt system.
This method is designed for large taxpayers who produce more than 500,000 invoices per month.
Appointed e-invoicing agent (service provider)
This method involves using a service provider to provide access, enabling the transmission of electronic invoices to the Thai national e-invoicing system.
Using an e-invoicing agent or service provider is excellent for large taxpayers who do not want to develop complex IT solutions for direct connection to the tax office.
The email method makes it easy for small taxpayers to fulfill e-invoice reporting obligations when sending the invoices to the recipients. You send the e-invoice as a PDF file to the recipient and CC the tax authority.
Characteristics of the electronic invoice in Thailand
While Thailand allows VAT-liable parties to issue electronic invoices and receipts to their customers voluntarily, e-invoicing in Thailand is regulated.
When parties exchange digital invoices, specific requirements regarding e-invoice format, e-signature, archiving, etc., must be met.
E-invoicing infrastructure in Thailand
The Thai government specifically developed the e-Tax Invoice & e-Receipt System (RTIR) as a platform for preparing and delivering electronic tax invoices and electronic receipts.
The platform uses international standards, ensuring private and public entities transacting can seamlessly exchange electronic invoices and related digital business documents.
E-invoice format in Thailand
The mandatory format for electronic invoices in Thailand is local XML (that is XML compliant with the Electronic Transactions Development Agency (ETDA) standards).
A PDF/A-3 copy of the invoice must also be generated and sent to the end user.
Electronic invoices exchanged in Thailand must contain information about the seller, buyer, and transaction values. Specifically, Thai electronic invoices must include the following data:
- The name of the customer
- The address of the customer
- A description of the goods/ services
- The price of the goods/ services
- The amount of VAT
E-invoices exchanged in Thailand need to have an electronic time stamp showing the date of issuance. These data are extracted monthly and transmitted to the Thai tax authority to fulfill reporting obligations.
Digital signature requirement
Electronic invoices exchanged in Thailand need to be digitally signed using prescribed means.
The e-invoices must have two digital signatures created using special hardware issued to the taxpayer (hardware security module) or a USB token.
The digital signatures must also be supported by a certificate and the signatory’s certificate number. The number is issued by the Tax authority’s approved certification body.
Thailand’s Electronic Transactions Act requires that electronic documents with digital signatures be stored for at least 5 years.
This means that tax invoices and supporting documents must be archived for the same period.
What should businesses do to comply with e-invoice regulations in Thailand?
To comply with the e-invoicing regulations in Thailand, you must register with the tax authorities, ensure e-invoices meet technical requirements, and use the submission method appropriate for your company.
The Thai e-Tax system applies to only VAT-registered suppliers. So to adopt the system, you need to be a taxpayer (which every business should be). Then apply to the tax authorities to allow you to issue e-invoices. Every applying party must be one of:
- A limited liability company
- A joint stock company with a fully paid-up registered capital of at least BHT 10 million (about EUR 265,000)
- A government agency.
The applying party must also have a track record of doing business over a period of time and have a sound internal control system.
Ensure you meet the technical requirements of e-invoicing formats and digital signatures. To add e-signatures, you’ll also need to get an electronic certificate from the Certification Authority.
Lastly, submit e-Invoices and e-receipts using the appropriate method. If you’re a small company with less than BHT 30 million per year income, you can submit via email. Otherwise, you must submit using the e-Tax and e-Receipt system.
You can manually upload data to the RD, connect your accounting system directly to the RD, or send data through a service provider.
Takeaway - Partner with Storecove to comply with e-invoicing regulations in Thailand
Thailand’s tax office has a law allowing VAT-liable parties to send electronic invoices and receipts to their clients voluntarily.
The regulations cover both B2B and B2C transactions. Interestingly, government agencies and most companies rely on e-invoices, so most taxpayers will need to comply with the Thai e-invoicing regulations.
Thailand uses the e-Tax and e-Receipt System for delivering electronic invoices. Partnering with a service provider is one of the easiest ways to send compliant e-invoices using the system.
Storecove is a reliable service provider that can help you access the Thai e-Tax system and deliver compliant electronic invoices. We help ensure your invoice meets every technical detail (like format, e-signature, etc.), transmit it through the right channel to your recipient, and ensures you meet tax reporting requirements.
More information about E-invoice Requirements in Thailand?