Thailand issues regulation on stamp duty payment for electronic documents

This summer, the Director-General of the Revenue Department issued an important regulation governing the payment of stamp duty on electronic documents.

Director-General Notification 58 (Notification 58), which was issued on June 28 2019, and came into effect on July 1 2019, is designed to plug legal loopholes that might have prevented stamp duty being paid on certain instruments submitted electronically.

Notification 58 follows substantial updates to Thailand's Electronic Transactions Act (2001), which came into effect in April 2019, designed to modernise the law for electronic transactions and improve oversight.

Under section 4 of the Electronic Transaction Act, a data message is defined as information generated, set, received, stored or processed by electronic means. Notification 58 applies to the following instruments made in the form of a data message under the Electronic Transaction Act:

• Employment contracts (including for the provision of a service);

• Financial loans or bank overdraft agreements;

• Authorisation letters, including powers of attorney;

• Proxy letters for voting at company meetings; and

• Guarantees.

Stamp duty must be paid on all these instruments. Payments made between July 1 2019 and December 31 2020 can be submitted in one of two ways:

• Electronically, via the payments system on the Revenue Department's website (www.rd.go.th) or through the application programming interface using the application form OrSor 9; or

• In cash at the competent Revenue Office using the application form OrSor 4.

From January 1 2021, all payments will need to be made electronically through the Revenue Department's website or through the application programming interface.

The application form and stamp duty payment must be completed either before the document's execution or within 15 days afterwards. If the payment date falls on a public holiday, the payment can be made the following day. Once the payment is complete, the instrument will be regarded as duty stamped and the payer will receive a certified code, which can be used as a reference for completion.

Other electronic documents not stipulated in Notification 58 can be duty stamped by using an adhesive stamp, an impressed stamp, or payment in cash. In practice, these other electronic documents must be printed in physical format for stamp duty payment.

Thailand has long maintained a robust framework for overseeing the legality of electronic documents to support growing digitisation in its economy. However, stamp duty compliance for electronic documents had previously been overlooked by taxpayers and regulations were inconsistently enforced by the Revenue Department.

Penalties for stamp duty non-compliance have remained the same but are likely to be implemented more tightly in the future. For agreements and commercial documents, these are:

• A stamp duty surcharge of up to six times the stamp duty payable in addition to the payment of the original cost; and

• Loss of enforcement rights under Thailand's civil and commercial laws.

This latest regulation is designed to reinforce the existing system while giving taxpayers clarity on their obligations and maintaining a favourable legal regulatory environment for the use of electronic documents. It signals the Revenue Department's intention to collect stamp duty payment more universally from instruments exchanged electronically, which represents a growing percentage of data.

Kudun and Partners

T: +662 838 1750

E: saravut.k@kap.co.th

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