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Tax that Beginners Should Know for Products Online Selling

Tax that Beginners Should Know for Products Online Selling

February 23, 2022

5 minute

COVID-19 has changed many people’s lives. Some people with enough income in the past may have to find extra income. The first profession most people think of is selling online because selling online doesn't require much investment like opening a physical store, so selling online is an interesting career in this generation.

However, before entering into this profession, you must understand the tax payment first because many people may still not understand about filing and paying taxes for online selling, for examples, how to file a tax, how much income is taxable or how to get ready before doing this job? Now, let’s find out!

 How to file tax return for online selling?

How to file tax return for online selling?

No matter what you sell and how much you gain, you have to file tax return as you are still considered a natural person who has to pay income tax. To pay or not to pay the tax, it depends on whether you have "net income" or "net profit" after deducting expenses.

If you gain income from online selling, you must file income tax Type 8 or Section 40 (8) when your income exceeds 60,000 Baht (in case you are  single) or 120,000 Baht (in care you are married) per year. You can choose to deduct the tax in 2 ways: actual deduction and 60% deduction.

Actual deduction

    • Suitable for online selling requiring high costs as this deduction allows high deduction amount. After the tax is deducted by the expenses, the net income to be taken into account for tax purposes shall be reduced accordingly. By this deduction, the income and expense records and all evidence must be prepared for easy checking to help reduce confusion when filing tax return.
      60% deduction
    • Suitable for online selling with high profits, for example, the actual profit less expenses is more than 40%, meaning that the cost of the business will be less than 60% of total income. The advantage is that you don't have to show any evidence of expenses to the Revenue Department, allowing lump sum tax benefit from the difference between the actual cost and expenses.

    Resorce: bangkokbiznews (Data as of 31/05/2021)

    When do I have to file tax return?

    When do I have to file tax return?

    Once you earn from online selling, whether working full-time as well or only selling online, you have to file tax return. By filing tax return for online selling, you have to submit in 2 rounds (Por. Ngor. Dor. 94 and Por. Ngor. Dor. 90) according to the period specified by the Revenue Department as follows:

      • The first half-year tax filing round: File tax return from 1 January to 30 June according to Por. Ngor. Dor. 94 Form during 1 July - 30 September in the same year. The half-year tax is to ease the burden of income earners in order not to pay too much tax at once.
      • The second half-year tax filing round at the end of the year: File tax return of all your income throughout the year in Por. Ngor. Dor. 90 Form during 1 January – 31 March of the following year (for example, the income of the year 2021 must be submitted by March 2022).

      In addition, if you sell online and earn more than 1.8 million Baht per year, you must register for VAT and submit VAT every month by the 15th of the following month. You are also required to issue tax invoices to your customers as well.

      Resorce: bangkokbiznews (Data as of 31/05/2021)

      You need to know what e-Payment is.

      You need to know what e-Payment is.

      New online sellers may wonder: If we did not file tax return for online selling, how could the Revenue Department find out? Well! Anyone who thinks of avoiding tax payment, listen carefully. Nowadays, there is a law requiring financial institutions to submit electronic transaction information, also known as "e-Payment”, which has been effective since 1 January 2020 for the Revenue Department to review the information. Conditions that fall under the Revenue Department's inspection are as follows:

      • When depositing or receiving money transfers in all accounts of at least 3,000 times per year, no matter how much the total amount is
      • When depositing or receiving money transfers in all accounts of at least 400 times in total and with total amount exceeding 2 million Baht per year

      For the conditions mentioned above, if a bank finds any account falling under any of the above, the bank has the right to review and submit the information to the Revenue Department. To conclude, it is best not to avoid tax payment.

      ซึ่งเงื่อนไขที่กล่าวมานี้ หากธนาคารพบว่าบัญชีไหนเข้าข่ายข้อใดข้อหนึ่งก็มีสิทธิ์ถูกตรวจสอบและทำการส่งข้อมูลให้ทางสรรพากร ดังนั้นไม่ควรหลบเลี่ยงดีที่สุด

      Resources: bangkokbiznews (Data as of 02/01/2022) and  page365

      Prepare to file taxes for online selling

      Prepare to file taxes for online selling

      At this point, anyone who is turning themselves into a new online seller needs to plan before filing tax return. If you lack a document or do something wrong just a little bit, some problems may occur.

      • Daily record the product selling and daily income and expenses account. In addition to helping us not get confused, the records also help us manage money more conveniently than recording on another day.
      • Collect all evidence related to the selling and financial transactions. In addition to allowing us to validate the records, it also helps reduce the problems when the Revenue Department asks for an inspection, especially in case the investigation found that the frequency and amount of money transferred into the account fall under the e-payment tax each year.
      • It is advisable to keep up to date with tax-related news because the conditions may be changed each year. This will help us manage our tax payment properly.

      Resource: postfamily  

      Although paying tax for online selling may take many steps, we believe that it is definitely not too difficult for the beginners. Keep in mind the advantages of paying taxes. In addition to paying the tax properly, you also don’t have to worry about being inspected by the Revenue Department to openly and freely sell your products online.

      Now, you have already prepared to plan the tax return filing, don't forget to plan for tax deduction as well. You will be provided with both health coverage and tax deduction from a health insurance from Muang Thai Life Assurance that provides the coverage of emerging diseases, recurring diseases, epidemics, critical illnesses and common diseases, with the amount of 200,000 Baht to 100,000,000 Baht. Insurable age is up to 80 years with long-term coverage until the age of 99 years*. Maximum tax deduction is 25,000 Baht per year.

      Example of premium rate for a female aged 35 is less than 65 Baht per day.
      Choosing D Health Rider in a plan of 5 million Baht

      It is the coverage for IPD treatment expense per any hospitalization, and annual mode of premium payment.

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      • Coverage period of this rider must not exceed the coverage period of the life insurance policy that this rider is attached to.
      • Premium is eligible for personal income tax deduction. This is subject to the Revenue Department.
      • Underwriting is subject to the Company’s rules.
      • Please study details of coverage, conditions, and exclusions before making a decision to purchase insurance.

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