Value added tax (VAT)

Value added tax (VAT)

Taxable persons

      • Sellers of goods in the course of their business or profession in Thailand
      • Providers of services in the course of their business or profession in Thailand
      • Importers of goods and services
      • Persons deemed by the law to be traders, e.g. a local agent of an overseas corporation selling good or providing services in Thailand services in Thailand

Exemptions

VAT – exempted businesses include the following:

  • Sales of agricultural produce, animals and animal products (except canned foods)
  • Sale of fertilizers, drugs or chemicals for the care of plants or animals, and insecticides or pesticides for plants or animals
  • Sale of ground fishmeal and animal feeds
  • Sale of newspapers, periodicals, textbooks and E-book
  • Rendering of services in the fields of modern medicine, auditing and litigation
  • Hospital services
  • Domestic transport of all types and international transportation by land
  • Leasing of immovable property
  • Businesses subject to specific business tax (SBT)

VAT Rate

Currently there are two VAT rates:

0%

 

 

 

7%

  • Exports of goods
  • Provisions of services that are used abroad
  • Sale of goods or services to the United Nations (UN), UN specialized agencies, embassies and consulates
  • Sales of goods or provision of services to government agencies or state enterprises under projects funded by a foreign loan or aid
  • International air or sea transportation services
  • Imports of goods or sales of goods or provision of services not subject to 0% rate or exempt

Chargeable event

Sale of goods: On delivery of goods, receipt of payment, transfer of  ownership or issuance of tax invoice; whichever first occurs
Import/export of sale: On payment of import/export duty or placing of guarantee, or on issuance of customer entry form if the good are dutyfree
Consignment sale: On delivery of the consigned goods to the buyer, receipt of payment, or issuance of tax invoice; whichever first occurs. To qualify as a consignment sale, there must be a written agency agreement between the trader and the agent; otherwise, delivery of goods to the agent will be regarded as a normal sale and subject to VAT immediately
Provision of service: On receipt of service fee or issuance of tax invoice; whichever first occurs
Imported service: On remittance of service fee
Hire purchase/installment sale: When installment is due, receipt of payment or issuance of tax invoice; whichever first occurs

VAT registration

VAT registration must be made within 30 days after revenue exceeds THB1.8 million, or before commencing business. An overseas trader is only eligible to register for VAT if is to do business in Thailand for at least 1 year, or at least 3 months if engaged in a government project funded by a foreign loan or aid.

VAT return filing

  • A Phor Phor 30 form is to be filed and tax paid within 15 days of month end. The filing must be made by each place of business. Combined (joint) is possible if consented to by the Director-General.
  • For imported services, a Phor Phor 36 form is to be filed within 7 days of the end of the month in which the fee is remitted. However, the VAT trader can claim back the VAT cost.
  • For imported goods, an import entry form (regarded as VAT return) is to be filed with Customs before goods clearance. The VAT so paid is regarded as input tax.

If input tax exceeds output tax, a VAT trader may either claim a tax refund or opt to set off the excess input tax with the tax payable in the following month, indicating the preferred method in the tax return.

Unclaimable input tax

Unclaimable input tax includes the following:

      • Input tax on entertainment
      • Input tax on passenger cars (except for car sale/rental/insurance business)
      • Input tax on goods/services relating to passenger cars, e.g. gasoline and repairs (except for car sale/rental/insurance business)
      • Input tax under abbreviated tax invoices
      • Input tax on construction of buildings sold or used for non-VAT business within 3 years of completion
      • Input tax under tax invoice which bear signs of correction/alteration of particulars required by law
      • Input tax arising from types of business activity which are not subject to VAT
      • Input tax not  substantiated by a tax invoice
      • Input tax recorded in incomplete tax invoices

Input tax under a tax invoice issued by a person not authorized to do so