Thailand Law Library

by Thailand Lawyer

The following persons shall be taxable person under this Chapter;

1. business person,
2. importer.

For the purpose of value added tax collection, the following persons shall be taxable person as well:

• in the case where business person residing abroad and habitually selling goods or providing services within Thailand which having an agent in Thailand, is such agent;
• in the case of sale of goods or provision of services which subject to zero-rate value added tax under Section 80/1 (5), if later on ownership of goods or right of services are transferred to persons who are not UN, specialized agency of UN, embassy, consulate, is the said transferee of ownership of goods or right of services;
• in the case of import of goods classified in duty-exemption category under the law on Customs tariff which exempt from value added tax in accordance with Section 81 (2) (c), if later on such goods are subject to duty under the law on Customs tariff, is; person who are liable under the law on customs tariff, consignee, if such goods are transferred,
• in the case of merger, is the merger and new business person;
• in the case of transfer of business, is the transferor and transferee.

In the case where business person residing abroad, the person responsible for carrying on the business including employee or agent residing in Thailand who has the power to act on his behalf directly or indirectly shall be the person liable to value added tax together with the person under Section 82.

Under Section 82/7, 82/8 and 82/16 business person shall pay value added tax by deducting input tax from output tax of each tax month.

If output tax exceeds input tax, business person shall pay tax equal to the difference.

If input tax exceeds output tax, the difference shall be tax credit and business person shall be entitled to tax refund or tax payment in accordance with Part 8.

Input tax which is not deducted in tax calculation in the tax month under paragraph 1 because of necessary cause as prescribed by Director- General, shall be deducted in tax calculation in the tax month following such month in accordance with rule, procedure and condition as prescribed by Director-General, but not exceeding 3 years as from the date of issuance of tax invoice.

Under Section 83/5 , 83/6 and 83/7, a VAT registrant shall charge value added tax from the purchaser of goods or services at the time tax liability taking place by calculating the amount of tax from tax base under Part 3 and on tax rates under Part 4.

The provision of this Section does not prohibit a VAT registrant to offer or show the price of goods or services inclusive of value added tax to the purchaser of goods or service, whether or not the VAT registrant informs the purchaser of goods or service of such value added tax inclusive price.

Value added tax which VAT registrant charges from the purchaser of goods or service under this Section shall be his output tax.

Value added tax charged from a VAT registrant by another VAT registrant under this Section as a consequence of purchasing goods or services for use in his business shall be the input tax of the VAT registrant who is the purchaser of goods or services.

Input tax in the following cases shall not be deductible in tax calculation in accordance with Section 82/3;

• in the case where there exists no tax invoice or failure to show tax invoice as a proof of payment of input tax, except under reasonable cause in accordance with rule and condition prescribed by the Director- General;
• in the case where tax invoice contains incorrect or incomplete particulars which are essential in accordance with rule and condition prescribed by the Director-General;
• input tax not directly related to the carrying on of business of a business person in accordance with rule and condition prescribed by the Director-General;
• input tax arises from expenses on guest-entertaining or similar activity in accordance with 2 1 rule and condition prescribed by the Director- General;
• input tax from tax invoice issued by unauthorized persons under Part 10;
• input tax as prescribed by the Director-General with Minister’s approval.

In the case where VAT registrant carrying on both VAT and non-VAT businesses and use the acquired goods or services in both businesses, such VAT registrant shall allocate input tax to be deducted from output tax in value added tax calculation in accordance with rule, procedure and condition prescribed by the Director-General.

In selling of tobacco in category and kind prescribed by the Director-General with the Minister’s approval, the VAT registrant shall charge value added tax from the purchaser by calculating from tax base under Part 3 and on tax rates under Part 4 on every transaction.

In selling crude oil and oil product in accordance with Section 79/6, a VAT registrant shall charge value added tax from the purchaser by calculating from tax base under Section 79/6 (2)(a) or (5) and on tax rate under Part 4 on every transaction.

In the case where a VAT registrant sells goods or provides services and already includes output tax in the calculation of value added tax in order to pay value added tax in accordance with Section 82/3, if later on, any of the following events arise resulting in an increase in output tax wholly or partly, such VAT registrant shall include the increase output tax into the value added tax calculation in the tax month which a debit note is issued in accordance with Section 86/9:

• there is an increase in price of goods sold because of the amount of goods exceeding the agreed amount, miscalculation resulting in price of goods lower than the actual price, or other causes as prescribed by Director-General;
• there is an increase in price of services because of the provision of services exceeding the agreed amount, miscalculation resulting in price of service lower than the actual price, or other causes as prescribed by Director-General; The VAT registrant receiving debit note shall make deduction of value added tax by regarding it as his input tax in the tax month in which the debit note is received.

In the case where a VAT registrant sells goods or provides services and already includes output tax in the calculation of value added tax in order to pay value added tax in accordance with Section 82/3, if later on any of the following events arise resulting in a decrease in output tax wholly or partly, such VAT registrant shall deduct the decrease output tax from his output tax in the tax month which a credit note is issued in accordance with Section 86/10:

1. there is a decrease in price of goods because of goods not being as agreed, goods damaged or shortage, miscalculation of price of goods resulting in price higher than actual price or other causes as prescribed by the Director-General;
2. there is a decrease in service fees because of the provision of services not being as agreed, shortage of service, miscalculating of service fees resulting in price higher than the actual price or other causes as prescribed by the Director-General;
3. receiving the goods returned because of damages, goods different from samples or description , or any other causes as prescribed by the Director-General;
4. there is a termination of service contract according to causes and conditions as prescribed by the Director-General;

The VAT registrant receiving credit note shall deduct value added tax as appeared on the credit note from his input tax in the tax month in which such credit note is received.

In the case where a VAT registrant sells goods or provides services and already includes output tax into value added tax calculation in order to pay value added tax in accordance with Section 82/3, if later on, there arises bad debts from sale of goods or provision of services and the writing off of bad debts are in accordance with the amount, rule, procedure and condition prescribed by the Director-General, the VAT registrant shall deduct output tax calculated from bad debts from his output tax in the tax month in which the writing off of bad debts occurred. The calculation of bad debts in order to deduct it from output tax under paragraph 1 shall be 30 in accordance with rule, procedure and condition prescribed by the Director-General. In the relation with bad debts which have been written off under paragraph 1, if a VAT registrant has received payment later on, he shall include the received output tax calculated from bad debts under paragraph 1 into the output tax in the tax month in which payment is received.

In selling goods or providing services which subject to zero rate value added tax in accordance with Section 80/1 (5) and later on there is a transfer of ownership of goods or right of services resulting in liability to pay value added tax , the transferee who is required to pay value added tax in accordance with Section 82/1 (2) shall pay value added tax when tax liability taking place which calculated from tax base under Section 79/3 (4) and on tax rate under Section 80.

In the case where a business person residing abroad and carries on business in sale of goods or provision of services temporarily in Thailand without temporary value added tax registration in accordance with Section 85/3 or in the case where business person provides services from abroad and the services is used in Thailand, he shall be liable to value added tax and pay value added tax when tax liability taking place which calculated from tax base under Part 3 and on tax rate under Section 80 or 80/1, as the case may be.

An importer shall be liable to value added tax and pay tax on imported goods when tax liability taking place which calculated from t ax base under Part 3 and on tax rate under Section 80.

In importing goods classified in duty-exemption category under the law on Customs tariff , and later on there is a transfer of ownership of goods resulting in the liability to value added tax , the transferee who is required to pay value added tax in accordance with Section 82/1 (3) shall be liable to value added tax and pay value added tax when tax liability taking place which calculated from tax base in accordance with Section 79/2 (2) of Part 3 and on tax rate in accordance with Section 80.

To accommodate a business person who carries on his business in sale of goods or provision of services in Thailand and such business has the value of tax base exceeding value of tax base of small business under Section 81/1 but not exceeding value of tax base which calculated under the rules prescribed by Royal Decree, such business person shall be liable to value added tax which is calculated from tax base in the tax month and on tax rates as prescribed in Section 80/2. In calculating tax base under paragraph 1, paragraph 3 (3) of Section 79 shall not be applied. The business person under paragraph 1 who registers for value added tax is prohibited from charging value added tax from the purchaser of goods or service in accordance with Section 82/4 or issuing tax invoices.

The provision of Section 82/16 does not prohibit a business person from exercising his right to pay value added tax in accordance with Section 82/3, but if he has exercised such right, he cannot again apply Section 82/16.

A VAT registrant who liable to value added tax in accordance with Section 82/16 shall notify the Director-General of cases and within the time limit as follows:

• VAT registrant who wishes to calculate value added tax in accordance with Section 82/3 shall notify the Director-General in accordance with rule, procedure and condition as prescribed by the Director-General;
• VAT registrant who later on has value of tax base exceeding value of tax base prescribed in Royal Decree stipulated under Section 82/16, shall notify the Director-General within 15 days as from the date the value of tax base exceeding value of tax base as prescribed in such Royal Decree;
• The VAT registrant under paragraph 1 shall pay value added tax in accordance with Section 82/3 and is no longer allowed to calculate value added tax in accordance with Section 82/16;

In calculating value added tax under paragraph 2, input tax, charged by another VAT registrant at the time such VAT registrant is liable to pay value added tax in accordance with Section 82/16, shall not be deductible in the calculation of value added tax in accordance with Section 82/3.