What You Know About Value Added Tax in Thailand 您應該知道的泰國增值稅
Value Added Tax (“VAT”) in Thailand is tax on the sale of goods or the provision of services. Registration requires the submission of the VAT registration application (PP01) before commencing business or within 30 days after income exceeds 1.8m Baht per annum. The standard rate of VAT in Thailand is 10%, but the rate is currently reduced to 7% until 30 September 2023, unless further extended by the government.
VAT shall be collected on all activities of buying and selling. However, there are some activities of buying and selling that are subject to an exemption, or in certain cases, these VAT, if collected, can be requested for a VAT refund. These activities are:
Ø Exported goods;
Ø Services rendered in Thailand and utilized outside Thailand in accordance with rules, procedures, and conditions prescribed by the Director-General;
Ø International transport services rendered through aircraft or sea-going vessels;
Ø Supply of goods and services to government agencies or state-owned enterprises under foreign-aid program that Thailand is a recipient of such aid;
Ø Supply of goods and services to the United Nations and its agencies as well as embassies, consulate-general and consulates;
Ø Supply of goods and service that is used in the manufacturing other goods or rendering services that are not involved with manufacturing, within the Duty-Free Zone.
On the abovementioned activities, even though the VAT is collected at a 0% rate, they are still subjected to regular sale taxes if applied.
In calculations and declaration of VAT to the Tax Official, there are mainly 2 types of VAT, they are “Input VAT” which is incurred for the “Buying” of goods and services, including the importation of goods or services that is rendered or executed within Thailand and “Output VAT” which is incurred from “Selling” of goods and services to another party will be collected directly or can be collected by VAT registered individual from its “buyer” when goods or services are supplied.
On the calculations of VAT liability, it can be simplified as Output Tax minus Input Tax. When input VAT exceed output VAT (i.e. Where buying of goods and services is exceeding the sales of goods and services), refund can be claimed from Thai Revenue Department. This can be either in cash or as credit against future output VAT. In addition, tax payers that have only zero-rated income will have the option to reclaim the input VAT.
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