Thailand Value Added Tax (VAT): Registration, Rates, and Compliance Guide
Value Added Tax in Thailand is governedprimarily by the Revenue Code, together with Royal Decrees, MinisterialRegulations, and Notifications of the Director-General of the RevenueDepartment. VAT is a consumption tax imposed on the supply of goods and services,and on the importation of goods into Thailand, with businesses acting as taxcollectors on behalf of the state.
Thailand Value Added Tax Registration Requirements
Under Section 85/1 of the Revenue Code, abusiness operator is required to register for VAT where it supplies goods orservices in Thailand and its annual turnover exceeds One Million Eight HundredThousand Baht (THB 1.8 million).
VAT registration must be completed within thirty(30) days from the date the turnover threshold is exceeded. Failure to registerwhen required constitutes a criminal offence under Section 90/2, which is subjectto imprisonment for a term not exceeding one (1) month, a fine not exceeding FiveThousand Baht (THB 5,000), or both.
Importantly, failure to register does noteliminate tax liability. The person failing to register the VAT shall remainliable for the VAT amount as if properly registered. In addition to the unpaidVAT, the taxpayer is subject to surcharges and penalties under Sections 89 and 89/1 of the Revenue Code. A surcharge of up to two (2) times the amount of taxpayable may be imposed, and a monthly penalty of One point Five Percent (1.5%)of the outstanding tax applies, with any fraction of a month counted as a fullmonth.
Non-resident businesses providing services thatare used or consumed in Thailand may also trigger VAT obligations underSections 77/2 and 83/6 of the Revenue Code, depending on the transactionstructure. Where a foreign service provider is not VAT-registered in Thailand,VAT is generally collected through a reverse-charge mechanism, whereby the Thaiservice recipient is required to self-assess and remit VAT. The determiningfactor is the place of use of the service, not the location of the serviceprovider.
Thailand Value Added Tax Rates (7%, 0%, and Exemptions)
The statutory VAT rate under the Revenue Codeis Ten Percent (10%) pursuant to Section 80, but the current effective VAT rateis reduced to SevenPercent (7%) under Royal Decrees issued under the Revenue Code No.799 (Current Royal Decree is valid until 30 September 2026), which has generallybeen annually renewed upon the Government’s decision.
Certain supplies are zero-rated under Section80/1 of the Revenue Code, meaning VAT is imposed at Zero Percent (0%) whileinput VAT remains creditable. These typically include exports of goods andqualifying international services as prescribed by Notifications of theDirector-General of the Revenue Department on VAT No. 105.
Other supplies are VAT-exempt under Section 81of the Revenue Code, such as agriculture sales, educational services, andhealthcare services. In these cases, VAT is not chargeable, and input VAT isgenerally non-creditable, except as otherwise provided by law.
Some supplies are subject to Specific BusinessTax (SBT) instead of VAT because Thai law treats SBT as a substitute tax forcertain types of activities, mainly financial and similar businesses. Under Section77/3 of the Revenue Code, when a supply falls within the SBT categories listedin the Revenue Code, VAT is excluded by law, so that the transaction is taxedunder SBT only and not under VAT.
Thailand Value Added Tax Compliance and Filing Obligations
Registered VAT operators under Section 83/2 andtheir representatives under Section 83/3 are required to issue proper taxinvoices, maintain VAT records, and file monthly VAT returns (Form PP.30)within fifteen (15) days of the following month in accordance with Section 83.Any VAT payable must be remitted at the time of filing.
Input VAT may be credited against output VATunder Section 82/3, provided that the tax invoices comply with statutoryrequirements and the related expenses are incurred for VAT-taxable activities. Whereinput VAT exceeds output VAT, the excess may be carried forward or refunded inaccordance with Section 84, subject to Revenue Department procedures and auditreview.
Administrative and Criminal Penalties under Thailand Value Added Tax Law
Sections 90 to 90/5 of the Revenue Codeestablish a penalty framework for non-compliance with VAT obligations, rangingfrom minor administrative failures to serious criminal offences involvingintentional tax evasion. The severity of penalties escalates according to thenature of the violation, the degree of non-compliance, and the presence ofintent.
Section 90: Minor Administrative Offences
Section 90 addresses minor administrative andprocedural violations, such as failure to file VAT returns, failure to notifychanges to VAT registration details, improper issuance or retention of taxinvoices, and deficiencies in statutory reports. These offences are subject toa fine not exceeding Two Thousand Baht (THB 2,000) and are generally treated aslow-risk compliance failures.
Section 90/1: Registration and Disclosure Breaches
Section 90/1 addresses more seriousadministrative breaches, including failures related to VAT registrationadministration, disclosure of registration certificates, and notification ofbusiness transfers or cessation. These offences are subject to a higher fine ofup to Five Thousand Baht (THB 5,000), reflecting increased regulatoryimportance but without custodial exposure.
Section 90/2: Criminal Liability for Non-Registration
Section 90/2 introduces criminal liability forbasic VAT non-compliance, including operating without required VATregistration, failure to issue tax invoices, non-compliance with cash registerregulations, and disregard of orders from assessment officers. The offences aresubject to imprisonment of up to one (1) month, a fine of up to Five ThousandBaht (THB 5,000), or both, marking the transition from administrative tocriminal enforcement.
Section 90/3: Aggravated Enforcement Offences
Section 90/3 applies to aggravated proceduraland enforcement-related offences, such as unauthorized issuance of tax invoicesby overseas agents, use of unapproved cash register machines, failure toprepare mandatory VAT reports, and obstruction of tax officials. Sanctionsincrease to imprisonment of up to six (6) months, a fine of up to Ten ThousandBaht (THB 10,000), or both.
Section 90/4: VAT Fraud and Tax Evasion
Section 90/4 applies serious VAT offencesinvolving intent to evade tax, including fraudulent issuance or use of taxinvoices, false reporting, failure to issue invoices, and deceitful claims forVAT refunds. These offences carry severe criminal penalties, namely imprisonmentfrom three months to seven (7) years and fines ranging from Two Thousand Baht (THB2,000) to Two Hundred Thousand Baht (THB 200,000), reflecting the criminalnature of tax fraud.
Section 90/5: Director and Officer Liability
Section 90/5 extends liability to directors,managers, and responsible officers of juristic persons where a VAT offence iscommitted by a company as a result of their orders, actions, or failure to act.Such individuals are subject to the same penalties prescribed for theunderlying offence, reinforcing personal accountability in corporate taxcompliance.
Practical VAT Compliance Considerations in Thailand
VAT compliance in Thailand is heavily focusedon proper documents and audits under the Revenue Code. The Revenue Departmentchecks whether tax invoices are correctly issued, whether transactions are realand not just paperwork, and whether VAT returns match corporate income taxfilings. If documents are incomplete, inconsistent, or do not reflect actualbusiness activity, the business may face tax adjustments, penalties, andfurther investigation.
Companies involved in cross-bordertransactions, group structures, or specialized industries face higher VAT riskand should ensure that VAT is correctly charged, reported, and supported byproper internal controls to reduce audit exposure and disputes.
Conclusion
Effective VAT management in Thailand requiresstrict adherence to the statutory requirements of the Revenue Code. Beyond thecore duties of registration and monthly filing, businesses must prioritize theaccuracy of tax invoices and the maintenance of comprehensive VAT records tomitigate the risk of severe administrative and criminal penalties.
Given the Revenue Department's focus on document-based audits and the personal liabilityof directors, establishing a robust internal control system is essential forensuring full compliance and maintaining long-term business stability.
ILAWASIA stands with your business as a reliablepartner, growing alongside you with dedication to provide the VAT advisory andpractical guidance needed for every step of your journey. We remain committedto driving your proficiency in managing tax compliance and regulatoryrequirements, strengthening the foundation for your business.
