What Online Shop Owners Need to Know About Tax: A Plain-Language Starter Guide
Tax basics for online sellers: type 8 income, when to file the half-year and annual returns, the 1.8 million baht VAT threshold, bookkeeping and records to keep.
Your clothing shop on TikTok Shop is starting to sell well, with transfers arriving every day, when a friend asks: have you filed your taxes? A string of questions follows. Do I need to file, when, and do I have to pay if my income is still small? This article covers the basics that individual online sellers should know so you can start handling it the right way today.
This article is general information, not tax advice for your specific case. Rates and deadlines may change. Check with the Revenue Department or consult an accountant or tax adviser before making decisions.
What tax applies to online sellers?
The Revenue Department states that income from selling online is type 8 income, the same as a shop with a storefront. Whether you sell via Shopee, Lazada, TikTok Shop, Facebook or LINE, it must be included in your personal income tax calculation. Filing does not always mean paying: if your net income after expenses and allowances is low, the tax due may be zero.
Three taxes to understand
1. Personal income tax
The basic logic in the Revenue Department's guide is:
Net income = income minus expenses minus allowances, then apply the progressive tax rates.
For this income type, you can choose a flat expense deduction at the rate set by law, or deduct actual expenses, which requires full records. In addition, the Revenue Department requires people with type 2 to 8 income above the threshold to also calculate tax at 0.5% of assessable income, and pay whichever method gives the higher amount. Beginners often miss this, so have an accountant check your first year.
2. Value added tax (VAT)
According to the Revenue Department, businesses with revenue above 1.8 million baht per year must apply to register for VAT (form ภ.พ.01) within 30 days of exceeding the threshold. After registering, you must charge VAT to customers, issue tax invoices and file form ภ.พ.30 every month by the 15th of the following month. If your sales are approaching the threshold, plan your pricing and paperwork in advance.
3. Withholding tax
If you do paid work for companies, such as product reviews or content creation, the payer may withhold tax. Keep every withholding certificate, because it counts as a credit when you file your annual return.
Filing calendar to remember
- July to September: file the half-year return ภ.ง.ด.94 for income received January to June.
- January to March of the following year: file the annual return ภ.ง.ด.90 for the full year.
- Monthly: file ภ.พ.30 if you are VAT registered.
The Revenue Department often extends deadlines for online filing at rd.go.th, so check the latest dates each year.
Records you should keep
- A daily income and expense log: Google Sheets is enough, with columns for date, sales channel, sales amount and platform fees.
- Expense receipts: stock, shipping, advertising and packaging.
- Platform reports: download monthly sales reports every month.
- A separate bank account: keep shop and personal accounts apart; checking becomes much easier.
Online transactions always leave a trail, in bank accounts and platform systems. Filing correctly from the start is safer than waiting to be audited later.
Common mistakes
- Thinking low income means no need to file
- Receiving sales money in a personal account mixed with other money
- Not keeping receipts, so actual expenses cannot be deducted
- Passing 1.8 million baht in sales without noticing, because sales across all channels were not added up
Do not wait until March to think about tax. Record your numbers from today and filing becomes much easier.
Where to start this week
- Open an income and expense log and fill in this month's figures
- Download past sales reports from every platform you use
- Add up the year's sales to see whether you are near the VAT threshold
- Book one session with an accountant or tax adviser to set things up correctly from the start
To learn step by step, see the courses filing tax for a Shopee shop from data to submission, personal income tax calculation for beginners and tax for restaurants and drink shops, or browse more on Plants.work Learn.