Value Added Tax (VAT) in Thailand
Value Added Tax (VAT) is an indirect tax imposed on the value added of each stage of production and distribution. Any entity who regularly supplies goods or provides services deemed to be provided in Thailand and has an annual turnover exceeding 1.8 million baht is subject to VAT in Thailand.
Currently, the VAT rate is 7 percent and VAT registered person or entity is required to issue tax invoices every time the transactions are made showing details of nature and value of goods sold or services provided and also amount of VAT due.
However, some activities are exempted from VAT, for example; small entrepreneur whose annual turnover is less than 1.8 million baht, Sales and import of unprocessed agricultural products and related goods ,sales and import of newspapers, magazines, and textbooks, Professional services – medical and auditing services, lawyer services in court and other similar professional services that have laws regulating such professions and etc…
VAT liability is an amount that Output Tax exceeds Input Tax
- “Output Tax” is a tax collected or collectible by VAT registered person from his customers when goods or services are supplied.
- “Input Tax” is a tax charged by another registered person on any purchase of goods or provision of services. The term also includes any tax charged on imported goods.
In each month, if input tax exceeds output tax, taxpayer can claim for the refund, either in form of cash or tax credit to be used in the following months. The refund can only be claimed within 3 years from the last day of filing date.
Tax Forms to Submit to Government
- Any person or entity who is liable to VAT in Thailand must register to be VAT registered person or entity (Form VAT PorPor 01) (Free download for translation purpose only) before the operation of business or within 30 days after its income reaches the threshold. The registration application must be submitted to Area Revenue Offices if the business is situated in Bangkok or to the Area Revenue Branch Offices if it is situated elsewhere.
- VAT return must be filed on a monthly basis. VAT return (Form VAT PorPor 30) (Free download for translation purpose only) together with tax payment, if any, must be submitted to Area Revenue Branch Office within 15 days of the following month.
- Services utilized in Thailand supplied by service providers in other countries are also subject to VAT in Thailand. In such a case, service recipient in Thailand is obliged to file VAT return (Form VAT PorPor 36) (Free download for translation purpose only) and pay tax, if any, on behalf of the service providers.
The fine for late submission is 300 baht within the first 7 days and 500 baht after 7 days. The amount of penalty for VAT late submission is up to twice the amount of tax due that month and also a surcharge of 1.5 percent of the tax payable per month.
For Further information : Please visit the Revenue Department website.