2 March 2022

 

"Businesses in Thailand are generally required to obtain a VAT Certificate and make periodic VAT filings unless their business activities are specifically exempted from this requirement"

 

There are three main categories of business transactions which are subject to VAT: sale of goods, rendering of services, and the import of goods. The current rate of the VAT is 7%; however, many categories of goods and services are zero-rated (subject to 0% VAT) and many are exempt as described in Appendix A. Also, if the business’ gross income in the same fiscal year has not reached 1.8 million baht, the business is generally not required to be in the VAT system.

However, note that the company will be required to apply for VAT registration within thirty days of the date that the company’s income exceeds 1.8 million baht. Also, you should check the Revenue Code or consult with your accountant or tax attorney to determine whether any of the exceptions and/or zero ratings are applicable to your business. The following charts (Please download the Pdf file) and examples focus on the mechanics and timing issues associated with the VAT system.

The taxpayers are required to report their own separate VAT transactions to the Revenue Department each month. In each of the transactions in which VAT is applicable, parties to the transaction will be classified as either the buyer or the seller. The taxpayers are required to report both the amount of VAT they received from each buyer during that month (Output VAT) and the amount of VAT it paid to each seller during that month (Input VAT). The amount payable will be calculated as follows:

Output VAT (received) – Input VAT (paid) = Amount payable

For those transactions in which the reporting party is the seller, the reporting party is required to report how much VAT it received from each buyer during that month (Output VAT).

 

Filing Requirements

The reporting party is required to file a return, called Por Por 30, listing all VAT transactions for the reporting month and pay amounts payable (if any) for that reporting month within the first 15 days of the following month.

EXAMPLE: Suppose for the month of January, 5 baht was payable by Company A to the Revenue Department (Situation 1). Company A would be required to file a return, (Por Por 30), and pay 5 baht to the Revenue Department by February 15th. Exception Concerning Payments to Parties Offshore.

 

Exception Concerning Payments to Parties Offshore

An exception to the above rule applies to payments made by Thailand parties to parties offshore. When the reporting party makes a payment (in which VAT attaches) to a party offshore, the reporting party is required to file a separate VAT return, called Por Por 36, and pay any amounts payable associated with that payment offshore to the Revenue Department no later than seven days from the end of the month of payment.