Value Added Tax

Value Added Tax (VAT)

Taxes in Thailand are regulated and monitored by the Revenue Department of Thailand. There are several taxes which an individual or a juristic person needs to manage and pay. Juslaws & Consult advises that any company doing business in Thailand and having a gross monthly income of at least 300,000 Thai Baht or yearly income of 1,800,000 Thai Baht is required to register under the Thai Value Added Tax system if its goods or services are liable to VAT.VAT registration is also a prerequisite if you would like to hire a foreigner in your company since one of the major requirements for a Non-immigrant Visa and Work Permit are the tax documents of the company. Therefore, it is safe to say that if you are a foreigner or if you plan to hire a foreigner, it is best to consult with an accounting firm or professional like us to assess your information and situation.Exemptions
There are still exemptions to the VAT as mentioned on the Revenue Department’s website.

Exemptions

There are still exemptions to the VAT as mentioned on the Revenue Department’s website.

Certain activities are exempted from VAT. Those activities are :

  • A small entrepreneur whose annual turnover is less than 1.8 million baht;
  • Sales and import of unprocessed agricultural products and related goods such as fertilizers, animal feeds, pesticides, etc.;
  • Sales and import of newspapers, magazines, and textbooks;
  • Certain basic services such as:
  • transportation: domestic and international transportation by way of land;
  • healthcare services provided by the government and private hospitals as well as clinics;
  • educational services provided by the government and private schools and other recognized educational institutions;
  • professional services: Medical and auditing services, lawyer services in court, and other similar professional services that have laws regulating such professions;
  • income from a business, commerce, agriculture, industry, transport, or any other activity not specified earlier.
  • Cultural services such as amateur sports, services of libraries, museums, zoos;
  • Services in the nature of employment of labor, research and technical services and services of public entertainers;
  • Goods exempted from import duties under the Industrial Estate law imported into an Export Processing Zones (EPZs) and under Chapter 4 of the Customs Tariff Act;
  • Imported goods that are kept under the supervision of the Customs Department which will be re-exported and be entitled to a refund for import duties; and
  • Other services such as religious and charitable services, services of government agencies, and local authorities.
  • Exemptions

VAT Returns

The Revenue Department requires VAT returns to be filed monthly. At Juslaws & Consult our Accounting and Auditing department performs this monthly service for clients, along with calculating the amount of Value Added Tax payable. The amount payable each month is basically the amount of VAT collected by the company less the amount of VAT it has paid to others.

Value Added Tax returns must be submitted to the Revenue Department by the 15th of the following month. Once a company is Value Added Tax registered, a filing must be made monthly even if had no income that month.

Tax Registration

As instructed by the Revenue Department of Thailand, any person or entity who is liable to VAT in Thailand must register to be VAT registered person or entity (Form VAT 01) before the operation of a 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. Should taxpayers have several branches, a registration application must be submitted to the Revenue Office where the headquarter is situated.

Reports & Fines

Before the monthly Value Added Tax return is filed, our accountants prepare two reports – one for output VAT and one for input VAT. If the output VAT amount is higher than input VAT, the company is required to remit the difference to the Revenue Department. What this means is that the amount of Value Added Tax collected from customers is greater than the amount of Value Added Tax the company paid to its suppliers.

If the output VAT amount is less than input VAT, then the company can offset the output Value Added Tax due the next month. It is also possible to apply for a refund, but normal practice is to apply the difference to offset the next remittance.

A fine is levied for failing to submit a report or for a late filing. The amount of the fine is twice the amount of the tax owed plus a penalty of 1.5 percent interest on the unpaid amount.

Summary

Juslaws & Consult's lawyers have extensive knowledge on Value Added Tax also known as VAT regulations in Thailand and experience in providing tax services to businesses in Thailand. We have handled large corporations and Thai limited companies’ tax matters and we are confident to say that they were more than pleased with our tax services.

We offer consultations regarding tax services in Thailand and we would be happy to assist you if you need further services. If you require additional information on any of our Taxation services please do not hesitate to contact us.