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Thailand – indirect tax guide

Thailand – indirect tax guide

Explore the requirements and rules that apply to indirect taxes in Thailand.

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General

Type of indirect tax:

VAT.

Standard rate:

7 percent (this is a temporary rate, reduced from the standard rate of 10 percent introduced by a special royal decree and is valid unless renewed by 30 September each year).

What supplies are liable to the standard rate?

Importation of goods into Thailand; sale of goods in Thailand; provision of services that are performed and used in Thailand; and provision of services that are performed outside of Thailand and used in Thailand.

Are there any reduced rates, zero- rates or exemptions and if so, what do they apply to?

Zero-rated supplies include the export of goods; bringing domestic goods into a duty free zone; provision of services performed in Thailand but used outside of Thailand; provision of services for the manufacturing of goods within a duty-free zone or provision of services within a duty-free zone for the manufacturing of goods in Thailand for export; etc. Exempt supplies include fertilizers; fish meals; animal feeds; newspapers; magazines or textbooks; educational services; healthcare services; services of domestic transport; rent of all immovable property; etc.

VAT/GST registration

Who is required to register and what is the threshold?

A supplier carrying on the business of selling goods and providing services if the annual tax base of its business exceeds 1.8 million Thai baht (THB).

Is voluntary registration possible?

Yes.

Is voluntary registration available for an overseas company or a fiscal representative?

Yes, but an overseas company must appoint a fiscal representative and meet certain conditions prescribed by the Director-General of the Revenue Department.

VAT/GST compliance

What is the typical frequency of returns?

Monthly.

VAT/GST recovery

Are there any items that a registered business cannot recover VAT on?

Yes, VAT input tax is not recoverable if there is no tax invoice; if the buyer fails to show a tax invoice without a reasonable cause; if the invoice is incorrect or incomplete; if the input tax is not directly related to the carrying on of a business; if the input tax arises from entertainment expenses (entertaining guests or a similar activity); if the tax invoice was issued by an unauthorized person; or if the input tax is prescribed by the Director-General with the Minister’s approval, etc.

Can an overseas company recover VAT if it is not registered?

No.

How long does it typically take to obtain a VAT refund following a return filing?

3 to 6 months, depending on the tax compliance history of the VAT operator.

Invoices

Are there specific requirements for the content of invoices to be considered valid for VAT purposes?

Yes, a tax invoice shall contain the words ‘tax invoice’ in a prominent place; the name, address and taxpayer identification number of the supplier; the name and address of the purchaser; the serial number of the tax invoice; the description, type, category, quantity and value of goods or services; the amount of VAT on the goods or services; the date of issuance; and any other particulars as prescribed by the Director-General.

Particulars in a tax invoice shall be in the Thai language, Thai currency and Thai or Arabic numerals. However, a VAT operator may issue a tax invoice in English and use a foreign currency if approval is granted by the Director-General.

Special indirect tax rules

Does a reverse charge or indirect tax withholding mechanism apply?

Yes, a reverse charge can apply.

Rulings

Is it possible to apply for formal or informal advance rulings from the tax authority?

Yes.

Other indirect taxes

Are there any other indirect taxes that apply in the jurisdiction?

Other indirect taxes generally include the following:

  • specific business tax
  • customs duty
  • excise duty
  • stamp duty
  • land and building tax
  • signboard tax

Note that the land and building tax, which came into effect on 13 March 2019 with tax collection commencing from 1 January 2020, replaces Thailand’s house and land tax and local maintenance tax.

Contacts

Tatiana Bespalova
KPMG in Thailand
T: +66 2677 2697
E: tbespalova1@kpmg.co.th

Disclaimer

All information within this guide is provided by KPMG professionals in Thailand and based on information available as of September 2019.

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