BDO Indirect Tax News - Issue 3/2025 - July 2025
BDO Indirect Tax News - Issue 3/2025 - July 2025
Original content provided by BDO Global
Introduction
Global Trade Tensions and Indirect Tax Developments — What Thai Businesses Should Know
As global tariff and trade dynamics continue to evolve rapidly, businesses in Thailand engaged in cross-border trade must remain agile and informed. The recent updates from the United States and other key markets could influence export-import strategies, pricing models, and compliance obligations for Thai companies.
US Tariff Changes: Impact on Thai Exporters
The 10% universal tariff imposed by the US since early April—originally intended as a temporary measure while trade negotiations were underway—will soon expire. Although the Trump administration’s goal of “90 deals in 90 days” was not fully achieved, new (and potentially higher) tariff rates are now expected to take effect from 1 August 2025.
President Trump has sent formal notifications to several countries, including those in Asia, warning that tariffs will be imposed if agreements are not reached. For Thai exporters, especially in automotive, electronics, and textiles, it is critical to assess the tariff exposure and develop contingency plans, such as diversifying markets or revisiting supply chain structures.
Notable Global Trade Developments
- A US–UK agreement announced at the G7 summit in Canada will reduce select tariffs—offering a framework other countries, including Thailand, may examine when negotiating bilateral terms.
- Canada repealed its digital services tax following the suspension of trade negotiations with the US—highlighting the fragile nature of tax diplomacy.
- A tentative US–China deal hints at easing some tensions, but uncertainty remains, especially for regional manufacturers operating in global value chains.
Tariff Cost Allocation: Sales Tax Considerations
US importers often pass tariff costs on to consumers. For Thai businesses selling into the US or partnering with US importers, understanding US state sales tax implications is critical, particularly when pricing strategies shift due to increased landed costs.
Indirect Tax & E-Invoicing Compliance Trends in Asia and Beyond
Compliance obligations are rising globally for platform operators and digital businesses. Notably:
- China, Chile, and Laos have introduced new VAT rules for platforms—Thai e-commerce players operating regionally should review their structures.
- E-invoicing continues to gain traction globally. Countries such as Malaysia, Kenya, Poland, and Romania are moving forward with mandates, which may soon influence ASEAN-wide discussions.
What This Means for Thai Businesses
- Exporters must stay vigilant on tariff changes and develop risk mitigation strategies.
- Digital service providers and online platforms should track regional VAT rules closely to avoid penalties.
- Local companies expanding abroad should monitor global tax policy to remain compliant and competitive.