Definition & Rates
The Value-Added Tax (VAT) is a tax levied on the sale of goods or the provision of services. The current rate is at 7% but certain types of goods or services are subject to 0% VAT or are even exempt from VAT:
|Type of goods or services||VAT rate (%)|
|Sale and/or Import of goods
Provision of services (including payments for provision of services to foreign entities when the service is performed abroad but used in Thailand)
|Export of goods
Provision of services performed in Thailand but used/consumed abroad
International transportation by aircraft or ship
Sale of goods and services to government agencies or state enterprises under foreign aid programs
Sale of goods and services to the United Nations or related agencies, embassies and consulates
Sale of goods and services between bonded warehouses or between enterprises located in duty free zones
|Taxpayers with annual turnover < THB 1.8 million
Rental of immovable property
Sale and import of unprocessed agricultural products and related goods such as fertilizers, animal feeds, pesticides, etc.
Sale and import of newspapers, magazines, and textbooks
Educational services including government and private schools
Healthcare services provided by government and private hospitals as well as clinics
Medical, auditing and lawyer services in court
Domestic and international transportation by land
Cultural services such as amateur sports, services of libraries, museums, zoos
Religious and charitable services, services of government agencies and local authorities
Research and technical services
Imported goods exempt from import duties according to Customs Tariff Code
Imported goods processed by the Customs Department and re-exported abroad
Any individual or company that reaches THB 1.8 million in revenues during its fiscal year must register to VAT and an entity that wishes to apply for a Work Permit for a foreign employee must also register to VAT prior to submitting the Work Permit application (regardless of its turnover).
A VAT-registered person must issue a ‘Tax Invoice’ to its customers containing the following mentions:
- The wording ‘Tax Invoice’ in a prominent place
- Full name, Address and Tax identification number of the seller along with the wording ‘Head Office’ or ‘Branch no. xxxxx‘
- Full name, Address and Tax identification number (if any) of the purchaser of goods or services along with the wording ‘Head Office’ or ‘Branch no. xxxxx‘
- Serial number of Tax Invoice
- Date of issuance
- Description, quantity, value of goods or services
- VAT amount clearly separated from the amount of invoiced goods or services, example as follows:
Total Before VAT: THB 10,000
VAT: THB 700
Grand Total: THB 10,700
For the sale of goods, the VAT is due when the goods are delivered, regardless of when payment is made. Upon delivery, the seller typically issues a ‘Tax Invoice / Delivery Note’ and upon payment, it issues a ‘Receipt’. However, if advance payment is made before delivery, then the VAT is due upon payment receipt.
For the provision of services, the VAT is due when the customer pays, regardless of when the service is provided. Upon services rendered, the seller issues an ‘Invoice’ and upon payment, it issues a ‘Tax Invoice / Receipt’.
Calculation & Submission to the Revenue Department
VAT Payable = Output VAT – Input VAT where Output VAT refers to VAT collected from revenues subject to VAT and Input VAT refers to VAT paid through the purchase of goods or services subject to VAT.
The excess of Output VAT over Input VAT must be remitted to the Revenue Department while the excess of Input VAT over Output VAT results in a tax credit. VAT returns are filed on a monthly basis and the submission along with tax payment is due within the 15th of the following month (+8 extra days when submitted online).
Let’s say your company issued an Invoice on 15th January for the provision of consulting services for THB 10,000 + VAT. It also paid an Invoice on 20th January for marketing services to a supplier for THB 5,000 + VAT.
Output VAT = THB 10,000 * 7% = THB 700
Input VAT = THB 5,000 * 7% = THB 350
VAT Payable = THB 350 due within 15th February
The fine for late submission is THB 300 if the VAT return is filed within 7 days from the due date and THB 500 if it is submitted later. There is also a surcharge of 1.5% of the amount of tax payable per month.