Value Added Tax (VAT) is a consumption tax applied to the sale of goods or services in Thailand.
Businesses registered for VAT generally collect VAT from customers (Output VAT) and may deduct the VAT paid on business purchases (Input VAT), subject to applicable rules.
The standard VAT rate in Thailand is 10%, but currently reduced to 7% until 30 September 2026, unless extended by the government. In addition, certain transactions may be subject to a 0% rate depending on the nature of the activity.
Understanding VAT obligations is essential for entrepreneurs in Thailand to ensure compliance and avoid unnecessary penalties.
Businesses operating in Thailand may be required to register for VAT once their annual revenue exceeds 1.8 million THB.
VAT registration may also be beneficial or required in other situations depending on the business activity.
Examples include:
- Import/export activities
- Businesses working mainly with VAT-registered customers
- Companies choosing voluntary registration for operational reasons
- Certain specific business structures or activities
In some situations involving foreign employees, work permits or specific business structures, VAT registration may also become an important practical consideration.
Our team can assess your business activity and help determine whether VAT registration is required for your company in Thailand. Contact us for more detail.
Businesses registered for VAT in Thailand are required to issue Tax Invoices that comply with specific requirements under Thai regulations.
For many foreign entrepreneurs and expats, this can be confusing because the distinction between a standard invoice and a tax invoice does not exist in the same way in many countries.
What is the difference between an Invoice and a Tax Invoice?
An invoice is generally a commercial document used to request payment for goods or services.
A Tax Invoice, on the other hand, is a specific tax document used for VAT purposes. It allows VAT-registered businesses to properly declare VAT and, where applicable, support Input VAT claims.
A company may issue an invoice for commercial purposes, but if it does not meet the legal requirements of a Tax Invoice, it may not be accepted for VAT reporting purposes.
A Tax Invoice generally includes:
- The wording “Tax Invoice” displayed clearly
- Seller name, address and tax identification number
- Purchaser address and tax identification number (where required)
- Invoice serial number
- Details of value, nature and quantity of goods or services
- Amount before VAT
- VAT amount
- Total amount
- Total paid
- Total amount due = 0
- Date of issue (should be equal to payment date)
- Identification of the Head Office or Branch of the seller or purchaser involved in the transaction (where applicable)
Proper documentation is essential to ensure compliance and avoid issues during tax reporting.
Businesses registered for VAT in Thailand are required to submit VAT returns regularly to the Thai Revenue Department.
The filing process generally involves two main forms depending on the nature of the transactions.
PP30 – Monthly VAT Return
PP30 is the standard monthly VAT return used by VAT-registered businesses in Thailand.
This form is used to report:
- Output VAT collected from customers
- Input VAT paid on eligible business expenses
- The resulting VAT payable or credit balance
VAT-registered businesses are generally required to submit PP30 every month before the 23rd (in case of e-filing), including periods with no activity.
As a general rule, VAT on goods is recognized based on the date of sale or purchase, whereas VAT on services is recognized based on the date payment is received or made. Accordingly, VAT must be reported to the Thai Revenue Department in the corresponding tax period.
PP36 – VAT on services provided by overseas entities
PP36 applies in specific situations where a Thai business receives services from an overseas provider.
This situation may arise for expenses such as:
- Foreign consulting services
- Software subscriptions
- Digital services
- Professional services provided from abroad
Additional VAT obligations may apply depending on the nature of the transaction. VAT-registered businesses are generally required to submit PP36 every month before the 15th (in case of e-filing). Unlike PP30, a PP36 return is not required if the company had no transactions involving overseas services during the reporting period.
In the case of imported goods, VAT is generally collected by the Customs Department at the time of importation and must be paid upon customs clearance, typically through a customs clearance agent.
Important considerations
Deadlines may be adjusted when they fall on public holidays or when specific Revenue Department extensions apply. Managing VAT obligations involves more than simply submitting forms.
Businesses should ensure:
- Tax Invoices comply with Thai requirements
- Supporting documentation is properly maintained
- Filing deadlines are respected
- VAT treatment is correctly applied to transactions
Failure to comply with VAT obligations may result in penalties and surcharges.
Foreign entrepreneurs and companies operating in Thailand often face challenges such as:
- Understanding local VAT rules
- Determining whether registration is required
- Managing VAT documentation requirements
- Ensuring proper filing and compliance
As expats ourselves, we understand the practical challenges foreign businesses may face in Thailand. Our team helps simplify VAT obligations and ensures your business remains compliant.
👉 Contact us
Is VAT mandatory in Thailand?
Businesses generally become subject to mandatory VAT registration once their annual revenue exceeds 1.8 million THB.
However, many of our clients are foreign-owned businesses and expat entrepreneurs who register earlier as part of their company setup and operational requirements, particularly when planning to employ foreign staff.
We help businesses determine when VAT registration is appropriate and ensure the process is handled correctly.
What is the VAT rate in Thailand?
The standard VAT rate in Thailand is currently 7%. Certain transactions may qualify for a 0% rate depending on the type of goods or services and applicable regulations.
Do I have to submit VAT returns if my company had no activity?
Yes. VAT-registered companies are still required to submit monthly VAT returns (PP30) even if there was no business activity during the reporting period.
What happens if I do not register for VAT, or if I file VAT late in Thailand?
Failure to comply with VAT obligations may lead to penalties, surcharges and administrative issues.
