What is Value Added Tax (VAT) of Thailand ?

VAT, or Value Added Tax

Value Added Tax in 2022 (VAT) is a tax on the sale of goods. or by providing services in each manufacturing process and by selling goods and services produced domestically and imported from other countries. Since 1992, entrepreneurs in Thailand have been charged VAT at a rate of 10%, divided into 9% VAT and another 1% local tax, but in 1997, a royal decree was issued to reduce the VAT rate, which will be considered further. It is reduced to 7% every 2 years to ease the burden on citizens during the country’s economic and financial crisis. up to now.

In 2022, the formula for calculating VAT is as follows :

The value of the goods/services x the tax rate (7%) = VAT.

Who is required to register for VAT (VAT registration) ?

An entrepreneur who sells goods or provides services in the course of business or profession, whether as a natural person, a partnership, or a juristic person. If their annual revenue from sales of goods or services exceeds 1.8 million baht, they are required to file a VAT registration application in order to become a VAT registrant.

Method by calculating value added tax (VAT) payable

VAT payable = Output Tax – Input Tax

Output Tax > Input Tax = VAT payable

Output Tax < Input Tax = Tax that is eligible for a refund or Tax Credit.

What is Sales Tax (Output Tax)?

Value Added Tax that a VAT registrant may collect or be required to charge purchasers of goods or service recipients.

What is Input Tax?

When VAT registrants purchase goods or pay for services for use in their own business, they pay VAT to the seller or service provider who is a VAT registrant. This deductible input tax also applies to capital goods purchases.

Penalties for those who fail to register for VAT

Shall be subject to a maximum of one month’s imprisonment or a fine of not more than 5,000 baht, or both.
Pay the VAT calculated on the sales of goods or services. From the date of value added tax (VAT) registration.
Pay a penalty equal to twice the amount of tax due in any given tax month.
Pay a monthly penalty of 1.5 percent of the tax payable, or a fraction of a month’s tax payable.
Has no right to apply the value added tax charged by other registrants while the registration is not yet to be deducted from the tax payable (sales tax)

When must entrepreneurs submit a value-added tax (VAT) return?

Filing VAT form P.P. 30
Registrants must submit a P.P. 30 form. Ready to pay VAT (if any) on a monthly basis every tax month. Regardless of whether the sale of goods or services is performed in that tax month or not. The form must be submitted by the 15th day of the following month.
Filing VAT remittance form P.P. 36
2.1. When a person makes a payment for goods or services, Have a legal obligation to file a tax return within 7 days of the end of the month in which the payment is made to entrepreneurs outside the Kingdom who enter the business of selling products or providing services in the Kingdom temporarily and are not temporarily registered for VAT, or operators who have provided services abroad and used them in the Kingdom.
2.2. In the case of an auctioneer who sells a VAT registrant’s property at auction or a government agency that sells a VAT registrant’s property that has been legally seized through any method other than an auction Have a legal obligation to file a tax return within 7 days of the end of the auction month.
2.3. In the case of being a transferee of goods or as an assignee of rights in services subject to VAT at a rate of 0%, they are obliged to submit a tax return within 7 days from the end of the month in which the liability to pay VAT.