Thailand Law Library

by Thailand Lawyer

Subject to Section 78/3, value added tax liability for sale of goods shall be in accordance with the following rules:

1. Tax liability for sale of goods, other than those specified in (2), (3), (4) or (5), shall take place at the time of delivery of goods, except in the case where the following events take place before the delivery of goods the tax liability shall be at the time when such events take place:

   1. transfer of ownership of goods,
   2. payment received for goods sold, or
   3. issuance of tax invoice,

   However the tax liability shall take place upon the parts of such event as the case may be;

2. Tax liability for sale of goods under hire-purchase contract or installment sale contract which the ownership of goods sold is not yet transferred to the purchaser on the delivery, shall take place at the time each periodic payment due, except in the case where the following events take place before each periodic payment due then the tax liability shall be at the time such events take place:
1. payment received for goods sold, or
2. issuance of tax invoice, however the tax liability shall take place upon parts of such event, as the case may be;

3. Tax liability for sale of goods through an agent appointed to sell and goods have been delivered to the agent, however, only under agency contract to sell certain categories of goods and in accordance with rules, procedures and conditions prescribed by the Director-General with the Minister’s approval, shall take place at the time of delivery of goods to the purchaser, except in the case where the following events take place before goods delivered to the purchaser, then the tax liability shall be at the time such event take place-

   1. an agent transfers the ownership of goods to the purchaser;
   2. an agent receives payments for goods sold;
   3. an agent issues tax invoice; or
   4. goods are used whether by an agent or other persons;

   However the tax liability shall take place upon parts of such event, as the case may be;

4. Tax liability for export of goods, shall take place as follows-
1. tax liability for export other than those specified in (b) or (c), shall take place at the time of payment of export duty, placing of security, or providing guarantee, except in the case where goods are not subject to or are exempt from export duty as the case may be, then tax liability shall take place on the date of passing an entry under the Customs law;
2. tax liability for export by way of taking goods into customs free zone in accordance with Section 77/1 (14) (a), shall take place on the date domestic goods taken into the said zone;
3. tax liability for export of goods stored in bonded warehouse under the customs law, shall be at the time when the liability under the Customs law takes place;

5. tax liability for sale of goods subject to value added tax at zero rate under Section 80/1 (5) and subsequently transferred resulting in liability to pay value added tax by a transferee in accordance with Section 82/1 (2), shall take place at the time when the ownership of goods is transferred.

   To lessen the burden of tax return filing and tax payment of a VAT registrant from sale of goods to a ministry, department, or local authority, prescribed by Ministerial Regulation, the Director-General, with the Minister’s approval, shall have the power to specify the tax liability indicated in (1), (2) and (3) differently.

Subject to Section 78/3, tax liability taking place as a result of provision of services shall be in accordance with the following rules-

1. tax liability for provision of services, other than those stated in (2), (3) and (4), shall take place at the time of receiving payment of services performed, except in the case where the following events take place before receiving the payment, then the tax liability shall be at the time such events take place:

   1. issuance of tax invoice; or
   2. use of services whether by himself or other persons;

   However, the tax liability shall take place upon parts of such events, as the case may be,

2. the tax liability for the provision of services under a contract which a consideration is paid upon part of services performed, shall take place at the time of payment for each part of completed services, except in the case where the following event takes place before receiving payment of each part of services, then the tax liability shall be at the time such events take place-
1. issuance of tax invoice; or
2. use of services whether by himself or other persons; However, the tax liability shall take place upon parts of such events, as the case may be,
3. all or part of tax liability for provision of services performed in a foreign country and used in Thailand, shall take place at the time the payment is received wholly or partly, as the case may be;

4. tax liability for the provision of service subject to value added tax at zero rate under Section 80/1 (5) and subsequently transferred resulting in the transferee being required to pay value added tax in accordance with Section 82/1(2), shall take place at the time of receiving payment.

   To lessen the burden of tax return filing and tax payment of a VAT registrant from the provision of services to a ministry, department or local authority, under contract and on payment made according to rules, procedures and conditions prescribed by a Ministerial Regulation, the Director-General, with the Minister’s approval, shall have the power to specify the tax liability indicated in (1) and (2) differently.

Tax liability for import shall be in accordance with the following requirements-

1. for import other than those under (2), (3), or (4), tax liability shall take place at the time of payment of import duty, depositing of security, or providing guarantee, except in the case where goods are not subject to or exempt from import duty, then tax liability shall be at the time of passing the entry under the Customs law;
2. for import way of bringing domestic goods into Customs free zone and subsequently taking them out of the zone but not for the export purpose as prescribed in Section 77/1 (12), the tax liability shall take place on the date of taking such goods out of the zone but not for the export purpose;
3. for import of overtime goods under the customs law, tax liability shall take place at the time of sale by auction or any other mean by government authority in order to bring the proceeds of the sale to pay taxes, storage fees, removal fees or charges in accordance with the procedures prescribed in the Customs law;
4. for import of goods classified in duty-exemption category under the law on Customs tariffs and exempt from value added tax according to Section 81 (2) (c), if subsequently goods are subject to duty under the law on Customs tariffs resulting in the liable person under such law or transferee of goods being liable to value added tax under Section 82/1 (3), the tax liability shall take place at the same time as the liability under the law on Customs tariffs.

Tax liability for sale of goods or provision of services in the following cases shall be in accordance with Ministerial Regulations-

1. sale of incorporeal goods such as rights in patent, goodwill, sale of electric current, sale of goods of a similar nature, or sale of certain goods which the time of delivery cannot be determined precisely because of its nature;
2. sale of goods or provision of services through automatic machines which the method of payment is by insertion of money, coins, or notes into a machine or by other mean of a similar nature;
3. sale of goods or provision of services which the payment is made by credit cards or by other mean of a similar nature;
4. sale of goods under contract to sell goods under Section 77/1 (8) (a);
5. sale of goods under Section 77/1 (8) (d), (e), (f) or (g).

The Ministerial Regulation may prescribe the liability to take place differently according to category of goods or services.

Subject to Section 79/1, tax base of sale of goods or provision of services is the total value received or receivable by a business person from sale of goods or provision of services including excise taxes under Section 77/1 if any.

Value of tax base shall include money, property, consideration, service fees or benefits calculable into money term.

Value of tax base shall not include-

1. discount or allowance given by a VAT registrant at the time of sale of goods or provision of services and expressly shown on the tax invoice issued, in the case of issuing an abbreviated tax invoice in accordance with Section 86/6 or 86/7, the VAT registrant is not required to expressly show such discount or allowance on the abbreviated tax invoice,
2. rebate or subsidy as prescribed by the Director-General with the Minister’s approval, output tax,
3. consideration of descriptions and conditions prescribed by the Director-General with the Minister’s approval.

Tax base of certain sale of goods or provision of services shall be according to the following rules

1. tax base of export of goods is the F.O.B. price plus excise tax specified under Section 77/1(19), and other taxes and fees as prescribed by Royal Decree but excluding export duty. F.O.B. price is the price of goods at customs station excluding insurance and transport costs from the Customs station to a foreign country;
2. tax base of the provision of international transport services-
1. in the case of transport of passengers, is the value of transport fares, fees and any benefits collected in Thailand prior to deduction of any expenses arisen from such transport of passengers;
2. in the case of transport of goods, is the value of freight charges, fees, and any benefits collected in or outside Thailand prior to deduction of any expenses arisen from such transport of goods out of Thailand;
3. tax base of certain sale of goods or provision of services other than those under (1) or (2) shall be in accordance with Royal Decree.

Tax base of import of goods shall be according to the following rules.

Tax base of import of goods is the C.I.F. price plus import duty, excise tax under Section 77/1 (19), special fees under the Investment Promotion law and any other fees as prescribed by Royal Decree.

In a case where an importer is granted exemption or reduction of import duty under the law on custom tariff or other laws, the exempted or reduced import duty shall be included in the value of tax base.

C.I.F. price is the price of goods plus insurance and transport costs to the customs station of importation except:

• (a) in the case where the Director-General of the Customs Department announces that the market price of certain types of goods are subject to duty on average price under the law on Custom tariff, such price shall be deemed the price of goods in the calculation of C.I.F. price,
• (b) in the case where the customs official assesses the price for the purpose of payment of duty under the law on Customs, such price shall be deemed the price of goods in the calculation of C.I.F. price;

Tax base of import of goods classified in duty exemption category under the law on Customs tariff and exempt from value added tax in accordance with Section 81(2)(C), if subsequently such goods are subject to duty under the law on Customs tariff resulting in the liable person under such law or transferee of goods to be liable to value added tax according to Section 81/1 (3), the tax base of such goods is the value of goods in condition and quantity as on the date of taking place of tax liability in accordance with Section 78/2(4).

In calculating tax base of sale of goods or provision of services in accordance with Section 79, the value of tax base at the time tax liability taking place shall be taken into the calculation, except in the following cases-

1. for sale of goods or provision of services is not for a consideration, or for a consideration lower than market price without reasonable cause, the value of tax base shall be the market price of goods or services on the date tax liability takes place;
2. for sale of goods or provision of services in the case where a business person using goods or services whether by himself or other persons not directly for the purpose of a business carried on by him as specified in Section 77/1 (8) (d), (10), the tax base shall be the market price of goods or services on the date the tax liability takes place.
3. for sale of goods under Section 77/1 (8) (e) by way of shortage of goods in a report of goods and raw material in accordance with Section 87 (3) or paragraph 2 of Section 87, the tax base shall be the market price of goods or services on the date the tax liability takes place;
4. for sale of goods which subject to value added tax at the zero rate under Section 80/1 (5) and subsequently transferred resulting in liability to pay value added tax by a transferee in accordance with Section 82/1 (2), the tax base shall be the market price of goods in condition and quantity as on the date the tax liability takes place;
5. for sale of goods in the case where business person holds inventories and/or assets related to his business on the date of cessation of business, the tax base shall be the market prices on the date of cessation.

The market price under this Section shall be the average of market price on the date tax liability taking place after the rule on price examination specified by the Director-General has been followed. In the case where the market price cannot be determined, the Director- General by Minister’s approval shall have the power to announce the method of determining the market price.

In the case where value of tax base received or receivable from sale of goods, provision of services or import is expressed in a foreign currency, such value shall be converted into Thai currency in accordance with the following rules-

1. in a case where foreign money is received from sale of goods or provision of services and such money is sold for Thai money in the month the tax liability taking place, then the Thai money shall be deemed the value of tax base received or receivable from sale of goods or provision of services, as the case may be. In the case where the foreign money is not sold in the month the tax liability taking place, then the exchange rate applicable shall be the average selling rate of commercial banks which calculated on the last working day of the month the tax liability taking place by the Bank of Thailand;
2. in the case of import of goods, the C.I.F. price of imported goods expressed in foreign currency which shall be converted into Thai currency at the rate which the Customs Department applies in the calculation of import duty under the customs law.

Tax base of import and sale of tobacco in category and kind prescribed by the Director- General with the Minister’s approval shall be in accordance with the following rules:

1. for import, it shall be in accordance with Section 79/2;
2. for sale, it is the value of tobacco derived from deducting value added tax amount from the full retail price of tobacco. The value added tax amount shall be calculated at the value added tax rate on the full retail price.

Tax base of import and sale of crude oil and oil products as defined in this Section shall be in accordance with the following rule:

1. for import, it shall be in accordance with Section 79/2;
2. for sale;
1. in a case of crude oil, it shall be in accordance with Section 79;
2. in a case of each kind of oil product, it is the value of such kind of oil product derived from deducting value added tax amount from the full retail price of the such oil product. The value added tax amount shall be calculated at value added tax rate on the full retail price. The retail price of each kind of oil product in paragraph 1 shall be calculated in accordance with rule and condition prescribed by the Ministerial Regulation.

"Crude oil" means crude oil under the law on petroleum except where the Director-General prescribes otherwise.

"Oil products" means gas oil, kerosene, fuel oil for jet plane, Diesel oil, heavy oil, bunker oil, lubricant oil, liquidified petroleum gas and other oil products, however only products which the central committee of price fixing and monopoly prevention has set the retail price.

Tax base of sale of goods, provision of services or import of goods which is not provided for under the provision of this part shall be according to the Royal Decree and the provision of Royal Decree may prescribe any rules and conditions for the calculation of value of tax base of such business.