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Sukhothai Inter LawSukhothai Inter Law


Overview of Taxation in Thailand

:: Corporate Income Tax
:: Value Added Tax (VAT)
:: Zero Rated VAT
:: Specified Business Tax (SBT)
:: Personal Income Tax
:: Personal Income Tax Deductions
:: Other Taxes

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Taxation in Thailand - Value Added Tax (VAT)

Under the tax regime, value added at every stage of the production process is subject to a 7 percent tax rate. The transactions shall be affected by this tax are:

:: Sale of goods or provision of service by a supplier. Provision of service in Thailand means performing services in Thailand regardless of whether the use of such service is made in a foreign country or in Thailand. Moreover, a service, which is performed in a foreign country and is made use of in Thailand, shall be treated as provided in Thailand. A supplier is required for VAT registration under Section 85 or 85/1 or for temporary VAT registration under Section 85/3.
:: Importer or any other person who imports or brings goods into Thailand including those who remove from an export processing zone not for export any goods whether they be liable to or exempt from import duty under the customs law.
Persons liable to VAT in special cases:

:: A supplier residing outside Thailand and selling goods or providing services in the ordinary course of business with an agent.
:: Persons who sell goods or provide services liable to tax at the rate of zero percent to the United Nations, its specialized agencies, Consulate or Embassy, if the ownership in the goods or the rights in the services is then transferred to another person.
:: Where the import of goods listed in the part on goods exempted from duty under the Law Governing Customs Tariff and VAT are exempted, such goods afterwards become liable to duty under such law if

- That person has the liability under the Law Governing Customs Tariff.
- That person is the transferee, if the goods are transferred.
:: In the case of amalgamation: the persons amalgamated and the transferee shall be liable to VAT.
:: In the case of transfer of business: the transferor and the transferee shall be liable to VAT.

VAT must be paid on a monthly basis, calculated as Output tax - Input tax = Tax paid, where output tax is the VAT which the operator collects from the purchaser when a sale is made, and input tax is the VAT which an operator pays to the seller of a goods or service which is then used in the operator's business.

If the result of this calculation is a positive figure, the operator must submit the remaining tax to the Revenue Department not later than 15 days after the end of each month. However, for a negative balance, the operator is entitled to a refund in the form of cash or a tax credit, which must be paid in the following month.

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