Value Added Tax (VAT) in Thailand
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Value Added Tax or VAT as it is more commonly referred to, is one of the indirect that are levied in Thailand. Companies that are registered for VAT will need to add VAT onto the cost of the goods or services that they sell as well as being able to claim back any VAT that has been charged to them. Many companies that operate in Thailand do not need to be registered for VAT but there are 3 scenarios when it becomes mandatory.

These scenarios are:

  1. The turnover of company is greater than THB1.8 million in a financial year – the VAT application must be filed within 30 days of reaching this amount
  2. In situations where the company will need to apply for a work permit for a foreign employee
  3. The company will conduct activities that are subject to VAT such as the export of goods
Activity Rate Additional Information
Sale and Import of Goods and Services 7% Official VAT rate is 10% but was lowered during 1997 economic crisis and maintained year on year since
Export of Goods

Services Rendered in Thailand
but used abroad

Goods or services sold to a state enterprise, UN Organisation under a foreign loan or assistance project

International Transport Services

Sale of goods and services between bonded warehouses

Sale of goods within customs free zones

0% No VAT debits are counted but credits can be deducted

 

Domestic Transport

Rent of immovable property

Sale of agricultural products

Sale of newspapers, magazines & textbooks

Healthcare, cultural and educational services

Exempt from VAT

 

How the VAT System Works

Example:

  • Company X purchases stationery from Company Y (both companies are subject to VAT)
  • Company X will receive VAT credits
  • Company Y will receive VAT debits
  • Company X then sells their product to Company Z (subject to Vat)
  • Company X receives VAT debits
  • Company X than has the debits offset by credits (debit – credit = x)
  • Amount ‘x’ is then reported via a VAT Return Form (PP30) to the Area Revenue Office before the 15th of every month even when nil returns are showing.

FCA Thailand has many years experience dealing with VAT submissions on behalf of clients in a variety of different industries. FCA will complete the forms on your behalf as part of their monthly accounting charge as well as actually making the submission to the relevant Revenue Department office. If you would like more information about your VAT submissions or any other area of accounting services in Thailand, please contact us for more details.