Do you know how VAT works ? If they buy in a car for Bt500k, there is already VAT in that Bt500k price, which they have paid out, so that is their input VAT. When they sell it for Bt600k, that Bt600k includes their output VAT. What they pay to the revenue is 600k-500k x 7% = 7k If they didn't work on the margin scheme, they would have to account for the much larger swings of VAT on stock they were carrying which is why certain industries, like cars, travel, etc. work on the margin scheme to help their cashdflow.