Indirect tax - Thailand

Value Added Tax (VAT) is the principal indirect tax in Thailand. It is a broad-based indirect tax on consumption. The liability for VAT lies with the vendor or the service provider for each stage of production and distribution in Thailand.

Nonetheless, the actual incidence of the tax is normally borne by the ultimate consumer. The transactions subject to VAT include sale of goods, provision of services and imports.

VAT returns are filed and VAT is paid on a monthly basis with the filing of a VAT return (Form PP-30). The VAT amount is generally calculated by the business on the basis of the selling price or charges at that particular stage. The monthly VAT liability is then computed by taking the difference between output VAT accrued on its sales for the month and any input VAT credits accrued on its purchases, including credits for prior months.

Where the input tax exceeds the output tax either a request for refund can be made or the excess input tax can be carried forward into the future without limit.

The tax base of VAT for general goods and services is the total value received from the supply of goods or services. In addition, tax base also includes any Excise Tax that has been collected in connection with such supply (e.g. sale of motor vehicles). The tax base is exclusive of any discounts or allowances, but only if the discounts or allowances are clearly shown in the tax invoice.

There are two rates of VAT that are applied to goods and services in Thailand:

• the general rate (currently 7%)
• zero rated (0%).

Furthermore, some goods and services are exempt from VAT. In case non-VAT business purchases goods or services that are subject to VAT, it may not claim any input tax credit as it is not in the VAT system.

In addition, VAT is also paid at the time of import of goods into Thailand, with the input tax credit realized by the 'importer' of record.

All VAT registrants are required to post their VAT Certificate at their place of business.

Any person or entity that regularly supplies goods and provides services in Thailand which are not exempt from VAT is required to register as a VAT participant if its annual revenue exceeds Baht 1.8 million. A person or entity can still register for VAT even where its annual revenue is lower.

Furthermore, an importer is also subject to VAT in Thailand no matter whether it is a registered person or not. VAT will be collected by the customs department once goods are imported to Thailand.

In addition, an agent who sells goods or renders services on behalf of a trader not resident in Thailand is responsible for payment of VAT. For other non-resident traders, persons responsible for the operation of the business in Thailand on the trader’s behalf, have a joint liability with the traders for the VAT. Otherwise, the resident buyer of the goods and services from the non-resident trader is required to pay the VAT (self-assessed or reverse charge VAT).

In the case where a VAT registrant wishes to open an additional place of business, it must notify the revenue department office not less than 15 days prior to the date of opening the additional place of business in order to obtain the VAT certificate for such place of business.

No. A foreign business that is not established in Thailand and has no a permanent establishment or an agent in Thailand is not subject to VAT in Thailand. The foreign business, hence, is not required to register as a taxpayer in Thailand. However, if the foreign business carries on its business through a permanent establishment such as an agent, a subsidiary and a branch in Thailand, the VAT registration requirements shall be applied.

Furthermore, any person or entity who is liable to register VAT in Thailand must submit a registration form to the local Revenue Department Office either before the operation of business or within 30 days after the business’s income reaches the annual revenue threshold.

Yes. Thailand has imposed tax legislative relating to non-residents performing electronic services to customers in Thailand. Under the e-services tax regime, a non-resident service provider who provides services electronically to non-VAT registered customers (i.e., individual persons) in Thailand is required to register and pay VAT where the service provider’s income derived from such services in Thailand exceeds 1.8 million Baht per annum.  

VAT charged under the e-services tax regime is imposed at a flat rate of 7 percent of the service income. 

If a non-established business wishes still to register for VAT at its option, it must appoint a VAT agent to act on its behalf in the filing of monthly VAT returns. In such case the non-established business will then be able to offset any input VAT incurred for local purchases of goods and services against any output VAT collected on the sale of goods to Thai customers.

The VAT return together with payments must be submitted on a monthly basis to the Thai Revenue Department within 15 days from the end of the month in which the VAT liability arises. A return must be filed regardless of whether there are any VAT transactions or not.

In case of self-assessed VAT, the VAT return together with payments must be submitted to the Thai revenue department at a local office within seven days from the end of the month in which the VAT liability arises.

For electronic filing of VAT returns a further eight days is allowed for the filing of the return and payment.

If a taxpayer has several places of business, separate returns must be filed at each local revenue department office unless the taxpayer has applied to the revenue department for authority to file a return and pay tax at a single local office.

If a VAT return or the corresponding payment is submitted late a penalty and a surcharge will be imposed. If the taxpayer fails to file a tax return or a tax remittance return within the time limit, the penalty shall be twice the amount of tax payable or due in the tax month.

If the taxpayer files a tax return or a tax remittance return incorrectly or it contains errors affecting the amount of output tax, input tax or tax payable, the penalty shall be equal to the amount of the deficient output tax, the excess input tax or the tax additionally payable. However, if the tax payer amends the VAT return voluntarily, the taxpayer must pay penalty based on the number of days from the end of the time limit for paying VAT. The penalty rate can be as high as 20% of tax payable if the payment is made after 60 days from the end of the time limit for paying VAT.

In addition, a surcharge will be imposed when the taxpayer fails to pay or remit tax in full within the time limit. The surcharge is equal to 1.5% per month or fraction thereof of the amount of tax payable exclusive of penalties.

There is no other declaration required in Thailand.

Various penalties can be imposed where the taxpayer does not comply with the VAT rules. These include penalties for the failure to prepare and deliver a tax invoice to a purchaser; issuing a tax invoice, a debit note or a credit note without a lawful right to do so; using of a false tax invoice; failure to keep the copy of a tax invoice evidencing both input and output taxes; failure to prepare other records as required by law. The penalties can be imposed on both the taxpayer and its directors.

No, VAT incurred overseas cannot be claimed unless the business is a VAT-registered taxpayer in Thailand.

A VAT invoice must contain the following particulars at least:

• the word, 'Tax invoice', in a conspicuous spot
• name, address and tax-payer identification number of the registrant issuing the vat invoice, and place of business as it appears in the VAT certification (head office or branch no. 0000X)
• name, address and tax-payer identification number of the purchaser of goods or the recipient of services and place of business as it appears in the VAT certification (head office, or branch no. 0000X)
• serial number of the vat invoice, and of the pad (if any)
• name, type, category, quantity, and value of goods and services
• amount of value added tax computed on the value of goods and services, which shall be clearly separated from such a value
• date of issuance of the vat invoice
• any other information specified by the Director-General (ie many documents issued in the same set is required to contain the passage 'Document issued as a set').

The above particulars in the VAT invoice shall be in Thai language with Thai currency unit, and using Thai or Arabic numerals. However, it is possible to issue the VAT invoice in English or other languages or other currency under the notification of the Director-General of Revenue on VAT (No.92).

In addition, a registrant carrying on business of selling goods or providing services by retail to a large number of customers shall have the right to issue a summary tax invoice. However, a registrant carrying on a retail business who wishes to use a cash registering machine for issuing a summary tax invoice shall file an application to Revenue Department for the use of such a machine.