It has caused a massive rumble through the expat world here in Thailand, and worried many Thai small businesses. The recently announced "relaunch" of PayPal Thailand in February of 2022.
Suddenly account holders everywhere are getting this notice when they log in:
SEEMS like a fairly innocuous & irritating "update your data" issue at first glance.
But, in fact, it's a HUGE shift that will knock out a large segment of Thailand's current "informal" and digital nomad sectors - everyone from Thai-owned shops selling cheap Asian goods online, to English teachers, webchat moderators, life coaches, online yoga teachers and people seeking to stay off the banking sector's radar. Reserving your unlicensed cute little beachside mom&pop bamboo hut online? Hmmm... not with PayPal, anymore. Sitting on the beach in Koh Pha Ngan and selling online with some nice Thai family fulfilling & shipping for you? Not a thing if you can't access the payments to pay the Thai people relying on you for cash.
In a nutshell, what are the changes?
- from February 2022, you will only be able to withdraw funds from PayPal into your Thai bank if you (a) have a registered Thai company bank account in exactly the same name as your PayPal account and (b) are registered for Thai tax and VAT. And in order to do that, you have to have a registered Thai business, which requires you to (a) employ 4 Thai nationals and pay social security for them and (b) be up to date with your Thai taxes.
- from February 2022, you will not be able to hold a PayPal balance if you do not comply to these same requirements.
- PayPal.co.th accounts will no longer be able to transfer money directly to US bank accounts accounts.
- 7% VAT will automatically be deducted from all PayPal Thailand transactions.
Thailand is the first South East Asian country to be making this move, but others (Vietnam in particular) are tipped to follow.
At first I thought it had no effect on me at all, since I actually HAVE a registered Thai public company and am able to meet the requirements. But when I logged in to pull down some funds from online sales, I also got that notice. Turned out they just wanted updated documents and for me to agree to some new Terms and Conditions.
As I begrudgingly scanned and uploaded my current Thai business documents yet again I realized that it's much more subtle than it appears. Firstly because I have to give the name, current address and passport/ID number of ALL my current shareholders (presumably so they can be dragged into the tax net). Secondly because being current with the tax office has now become a requirement of being able to accept online payments through PayPal.
I've never been a PayPal fan but it IS the most widely used merchant gateway in this part of the world. For interest's sake, I doodled around & looked at what other gateways might work with my online store, and there are several. But they all have the same, fundamental requirement: upload your current Thai company, tax and VAT information.
What's the global take home from this very local Asian news?
- Covid has gutted tax budgets around the globe and many countries, like Thailand, are looking for new tax revenue sources to replace other deficits, like tourism. Expect similar actions in other common digital nomad destinations soon!
The opportunity?
With gateways closing for withdrawing online revenue into hard cash without harsh transaction fees and serious tax implications, the OTHER GATEWAY is opening even more than before - for people to not only buy crypto for speculation and investment, but to more and more begin using it as a serious alternative currency.
2022 looks to be shaping up for the year crypto really hits its stride. I'm excited!! And hopeful, if a little irritated at the paperwork juggling for this single mama to stay afloat during times of constrained travel and trade.
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And so the net tightens... I'm guessing paying tax is not as optional as it used to be in Thailand?
The coming years are indeed going to be interesting.
I honestly think 2022 is when we're going to see the REAL issues Covid has created globally - around crumbling tax revenue, immigration issues, who pays for health care etc... No, Thailand is no longer the cheap Asian playground it once was. Paying tax is becoming a 'thing' even for Thai people, who are somewhat appalled that tourism is no longer filling their coffers.
All I hear in my head is OH NO. Agree with both of you, next year we will see the REAL issues @artemislives and "so the net tightens" @minismallholding. Why don't more people see it? Why do so many just wiggle to get comfortable in the fast tightening "reality"
Probably for a variety of reasons, the main one likely being that it's not too much of an issue unless it affects you directly and generally the first ones affected are the little/poor people. When you've spent your life around the ones it affects and being the ones it affects, it's hard to miss the glaring signs. For those who've always been comfortable, they have no reason to believe it won't stay that way.
Yes, of course. I see it in our very own valley. Those that work the hardest and still get minimal (and less than) wage truly do live hand to mouth. They come to us for assistance all the time. I get so angry that those that SHOULD be helping them (their own employers) don't. They in turn, see no reason why their comfortable lives won't just continue that way
So right, @buckaroobaby! But to BE that empowering employer is far more complex than it looks - have a look at my blog about covid childcare for a glaring example. 😆 And yes, being surrounded by people who don't make a living wage is a gamechanger and one heck of a mirror!!
There has been a couple guys with Dash onboarding merchants for about 3 years. I would like to see more use of the BTC lightning network in Thailand.
https://dashnext.org/
Cheers
Thanks - I will check it out. The challenge is bigger than just providing a payment gateway, tho. If a vendor receives crypto for payment, but can't use that to buy materials or pay for shipping, they end up in a cash negative situation. Volatility is also a big one, as are fees. Pulling hive out as cash currently costs me upwards of $30 a time, so it really has to be because I NEED to when I do it.
Appreciate the link! 😊
I don't remember the details but as I understood the merchant took Dash for payment and that payment was instantly converted to BHAT at a very low fee. This was suppose to be much lower fees than visa.
If you can get a crypto.com card this could be a solution to eliminate the fees you are paying. I have not sold any Hive but I checked an you can trade it on simpleswap.io. If you trade it for a low transition fee coin such as VET, ALGO ect then use this coin to top-up the card.
I use this method almost exclusively traveling in SE Asia. There are also no foreign transaction fees and depending on the card you get there are no ATM fee up to certain amounts. And for me the Thai ATM fee's of foreign cards sucks.
Also I sent a generic link before. Here are a few better ones. If you are in Bangkok Felix and Sascha are great guys and have been boots on the ground in Thailand for over three years onboarding merchants. I went to several of their meet up's and at one time was a big fan of Dash.
Cheers & good luck!
https://docs.dash.org/en/stable/merchants/getting-started.html#payment-processors
https://www.facebook.com/DashDigitalCashTh/?ref=page_internal
https://www.facebook.com/groups/dashembassythailand
The more detailed links are great - thank you!! I'm in Chiang Mai (800km NW of Bangkok) but I shall see if I can find Felix & Sascha.
The time for crypto is now - we all need to get better at it - thanks for helping. 😍
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