Thailand
Thailand VAT is an indirect tax, imposed on the value added of each stage of goods production and distribution. Value Added Tax was implemented in 1992 and replaced Business Tax (BT). It’s important to notice that some businesses, excluded from VAT are liable to Specific Business Tax (SBT) tax.
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Vat standard rate
The VAT Standard rate in Thailand is 7%. Thailand’s government intends to increase the VAT rate to 10% on 30 September 2023.Vat zero rate
VAT zero rate categories include the following:- export of goods: When goods are exported outside of Thailand, they are generally exempt from VAT;
- supply of goods and services to government agencies or state-owned enterprises under foreign-aid programs: Transactions involving the supply of goods and services to government agencies or state-owned enterprises as part of foreign-aid programs are typically zero-rated for VAT;
- supply of goods and services to the United Nations and its agencies, as well as embassies, consulate-general, and consulates: Transactions involving the supply of goods and services to the United Nations, its agencies, embassies, consulate-general, and consulates are typically zero-rated for VAT;
- supply of goods and services between bonded warehouses or enterprises located in Export Processing Zones (EPZs): Transactions involving goods and services between bonded warehouses or enterprises located in EPZs are generally zero-rated for VAT.
Vat exempted goods
VAT-exempted goods include the following:- agricultural products, and goods related to them (for example fertilizers, pesticides, animal feeds, etc.);
- newspapers, magazines, and textbooks;
- goods exempted from import duties under the Industrial Estate law imported into Export Processing Zones (EPZs) and under Chapter 4 of the Customs Tariff Act.
This guide covers only the taxation of digital services. If you sell goods, this guide does not apply.
VAT Standard rate
The standard VAT rate in Thailand in 2024 is 7%.
VAT Standard rate
10%
VAT Reduced rate
-
Thresholds
1.8 million baht
Threshold
1.8 million baht (55,000 USD approximately) yearly turnover for a person or company that supplies goods regularly in Thailand. 1.8 million baht for an importer to Thailand. In this case, VAT is collected by Customs Department, the importer is responsible for paying the VAT amount to the Customs Department.Deductible vat
When a taxpayer’s VAT input exceeds their VAT output, they can claim a VAT refund. The refund can be received as a cash refund or used as a tax credit to offset future VAT liabilities. In the case of zero-rated transactions, taxpayers are always eligible for a VAT refund. If there is any unused input tax, it can be offset against the output tax within the following 6 months. It’s important to remember that the refund can only be claimed within 3 years from the last day of the filing date. Under VAT regulations, certain input taxes, specifically those related to entertaining expenses, are not eligible for credit. However, these non-creditable input taxes can be treated as deductible expenses under Corporate Income Tax (CIT). Although they cannot be used to offset VAT liability, they can still be claimed as deductions to reduce taxable income when calculating corporate income tax.Registration procedure
Companies or individuals liable for VAT are required to register for VAT before commencing business operations or no later than 30 days from the date their income reaches the VAT threshold. The VAT registration application should be submitted to the respective Area Revenue Offices or Area Revenue Branch Offices. If a company has multiple branches, the VAT application must be submitted to the Revenue Office where the headquarters is located. Complying with the VAT registration requirement within the specified timeframe is important to ensure legal compliance. For more specific guidance and accurate information, it is advisable to consult with the Thailand Revenue Department or a LOVAT tax professional.Vat representative
The appointment of a representative is not a prerequisite for registration.Vat return
In Thailand, the VAT period is one month, and companies are required to file VAT returns (Form VAT 30) monthly. The VAT return must be submitted to the respective Area Revenue Branch Office within 15 days of the following month. If a taxpayer has multiple places of business, each location must file a separate VAT return and make individual payments unless they have received approval from the Director-General of the Revenue Department for consolidated filing. VAT payments should be made concurrently with the submission of the VAT return within 15 days of the month following the reporting period.Threshold
Overseas suppliers of electronic services and electronic platforms, whose total income is 1.8 million baht per year from providing electronic services to customers who are not registered as VAT payers in Thailand, must register for VAT, submit VAT declarations, and pay VAT. These rules are effective starting from September 1, 2021, which is the date of the introduction of the regime.E-services list
- E-products such as mobile applications;
- Software programs;
- Digital images, videos, and financial data;
- Digital music, films, and games;
- Distance teaching via a pre-recorded medium such as online courses;
- Electronic data management such as website supply, web-hosting, automated and digital maintenance of programmer;
- Providing or supporting a business or personal presence on an electronic network;
- Search engines such as customized search-engine services;
- Listing services for the right to put goods or services for sale on an online market or auction house;
- On-demand streaming services where there is no interaction with the content provider;
- Advertising services on the intangible media platform.
Pieces of evidence
To determine whether an electronic service is used in Thailand, service providers or electronic platforms can rely on the customer’s information that they routinely obtain in normal business activity to determine where the electronic service is used. Such information can be one of the following information about the customer:- Billing information (for example, information about credit card, and bank account details);
- Residence information (for example, home address, billing address);
- Information about the access (for example, mobile country code of SIM card, IP address).
Registration procedure
The VAT registration form shall be filled and submitted electronically via the Simplified VAT System for e-Service (SVE) on the Revenue Department’s website.Documents required for VAT registration:
Company
- Certificate of incorporation officially translated into English and containing entity name, date of incorporation, and country of incorporation. The document must be notarized by the Ministry of Foreign Affairs, notary public, or other agencies authorized to notarize documents based on the law of the country where the business person is incorporated;
- Certificate of tax residency in the country of incorporation (optional).
Individual
- A copy of the person’s valid passport (only the first information page is showing the passport holder’s name, photo, and passport number) or a copy of the person’s valid national ID card.
- Certificate of tax residency in the country where the individual is a tax resident (optional).
Tax representative
The appointment of a representative is not a prerequisite for registration.VAT filing and payment
VAT returns shall be filed from the 1st to the 23rd of the following tax month. VAT returns shall be filed every month even though electronic service providers and electronic platforms have no income from the operation of the business in that tax month. If a VAT operator has filed a VAT return and is later found incorrect, the VAT operator shall submit an additional VAT return. VAT can be paid in Thai Baht via SVE through one of the following channels:- Transferring money to the Revenue Department’s bank account;
- Credit card.
Penalties
Offense |
Penalty |
| Doing business without VAT registration | A fine twice the tax due in tax month for the duration of failure to comply with such provision, or 1,000 Baht per month, whichever is greater |
| Late filing of VAT returns | A fine twice the tax due in the tax month |
| Filing an incorrect tax return affects the amount of tax due | Fine for the affected amount of tax |
Electronic platforms
Overseas electronic platforms shall register for VAT in Thailand when the following criteria are met:- Having a continuous process comprising offering service, receiving payment of service, and delivering service on behalf of Overseas electronic service providers;
- Such service is used in Thailand by a non-VAT registered customer;
- Having income from such service of more than 1.8 million baht in a calendar year (in case of sole proprietor/non-juristic partnership) or an accounting period (company/juristic partnership).
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