Phuket Legal Firm

Value Added Tax

Value Added Tax (VAT) in Thailand

Value Added Tax (VAT) in Thailand is a consumption tax imposed on goods and services that are consumed within the country. The current VAT rate in Thailand is 7%, and it is imposed on the value added at each stage of the production and distribution process. VAT is a significant source of revenue for the Thai government and is an important aspect of the country’s tax system.

Registration for VAT

Businesses that are registered for VAT in Thailand must charge VAT on their goods and services and to submit VAT returns to the Revenue Department. Businesses are required to register for VAT if their annual revenue exceeds 1.8 million baht. The registration process involves submitting various documents, including the business registration certificate, and the ID of the business owner. Our team can assist with the registration process, including document preparation and submission, as well as providing guidance on the ongoing compliance requirements of VAT.

VAT Return Filing

Once a business is registered for VAT, they are required to file VAT returns on a quarterly or monthly basis, depending on the level of its turnover. The VAT return must be filed within the first 15 days of the month following the tax period. The return must include details of all VAT charged and received by the business, as well as any input tax credits that the business is entitled to claim. Penalties may be imposed for late filing or non-compliance.

Input Tax Credit

An input tax credit is a credit that businesses registered for VAT can claim for the VAT paid on goods and services that are used in their business operations. Businesses can claim an input tax credit for the VAT paid on goods and services that are used to generate income, such as raw materials, office supplies, and transportation. To claim the input tax credit, businesses must keep detailed records of all VAT paid on goods and services, including invoices and receipts.

Exemptions and Zero-Rated Supplies

Certain goods and services in Thailand are exempt from VAT, such as financial services, healthcare services, and education services. In addition, certain goods and services are considered zero-rated supplies, which means that they are subject to VAT at a rate of 0%. Examples of zero-rated supplies include exports, basic necessities, and certain types of agricultural products.

VAT Refunds

Foreign businesses that are not registered for VAT in Thailand but are engaged in business activities within the country may be eligible for VAT refunds. To claim a VAT refund, foreign businesses must submit an application to the Revenue Department, along with relevant documentation such as invoices and receipts. The application process can be complex, and it is important to have a professional handle the process to ensure timely compliance and avoid penalties and fines.

Penalties for Non-Compliance

Businesses that fail to comply with VAT regulations in Thailand may be subject to penalties, including fines and interest. Penalties may also be imposed for errors or omissions on VAT returns. In addition, failure to comply with VAT regulations can result in the revocation of the business’s operating license.

How Phuket Legal Firm Can Help

Filing VAT in Thailand can be a complex and time-consuming process, and it is important to have a professional handle the process to ensure timely compliance and avoid penalties and fines. Phuket Legal Firm offers comprehensive VAT services to our clients in Thailand.

Our team of experienced professionals can assist with the registration process, preparation, and filing of VAT returns, as well as provide guidance on the exemptions, input tax credits, and ongoing compliance requirements of VAT. By using our services, businesses can save time and money by ensuring compliance with the laws and regulations and receiving valuable advice and assistance throughout the process.