Vat When Exprting

[anthoma]

We have a small company that export som clothes to Europe in small scale. Our accounting-office say that we have to put 7% VAT on the invoice when we send it to our customer. Then they say that we have to apply for refund of the VAT. Can that be rigth? If our customer pay the VAT, then he should ask for refund, ore if we ask for refund, we have to pay the VAT back to our customer? For me this dont make sence. I cannot believe that a customer in Europe have to pay VAT to Thailand, and then when he sell the clothes in Europe i'm sure he have to put his countries Vat on the clothes. So you pay VAT to two countries for the same clothes?

Somebody know about this?

[PattayaParent]

I'm trying to sort out a similar problem with regards my company also.

As far as I can tell, YOU pay the VAT to the Thai Revenue Department and then YOU claim it back.

If you try to charge your customer an extra 7% he may just go elsewhere?

[imaneggspurt]

We have a small company that export som clothes to Europe in small scale. Our accounting-office say that we have to put 7% VAT on the invoice when we send it to our customer. Then they say that we have to apply for refund of the VAT. Can that be rigth? If our customer pay the VAT, then he should ask for refund, ore if we ask for refund, we have to pay the VAT back to our customer? For me this dont make sence. I cannot believe that a customer in Europe have to pay VAT to Thailand, and then when he sell the clothes in Europe i'm sure he have to put his countries Vat on the clothes. So you pay VAT to two countries for the same clothes?

Somebody know about this?

There is no vat content unless done on a large ( as in containers ) scale,.then you claim it back if exported,

[anthoma]

I just came across the web-page for The Revenue Departement of Thailand. The adress is: www.rd.go.th (not link). Click on English language, then click on Tax Structures, and then click on Value Added Tax (VAT). Here i can read that the VAT rate on export is zero. I hope i understand this right and that i dont have to worry about VAT when i send the clothes to Europe.

[p_brownstone]

I think perhaps you mis-understood your Accounting people.

There is no VAT payable on Export from Thailand - so you do not need to add VAT to your Invoices to your oversaes Customers.

However, your supplier in Thailand will have added 7% VAT to their invoices to your Company, so you have already paid this to your supplier here, who in turn has paid it to the Thai Revenue Department.

In theory at least you can reclaim ths VAT from the Thai Revenue Department, however this can be problematic, particularly for a small Company here, the Revenus Department will check your claim for refund very carefully; they will also check the status of your Company and that of you yourself - whether you are in posession of a correct Visa and a Work Permit etc..

Make sure you are "squeaky clean" before you try to claim a refund.

Patrick

[anthoma]

We bought our clothes in a factorie in Bangkok. Got the reciept from them including 7% Vat and the accounting office already sendt for refund. What they said was that we had to add 7% VAT on the receipt we sendt to the European company, and that what i said have to be wrong.

Everything with this company is in my girlfriends name. I dont do anything with this, but i react when somebody tell here to do something that i think have to be wrong and then i try to check whats right to help here not loosing money. I think its very diffecult to get the right answers here i Thailand. We go from office to office and get different answers. Nobody seems to now anything in this country.

[Remix4]

p_brownstone is correct. We own an export company and you do not charge VAT on your commercial sales invoices. The VAT issue is only concerning the claiming back of VAT on your purchases. This can be done when you file your monthly VAT returns assuming that you have the appropriate export documents and customs declaration forms.

[anthoma]

Thats good to know. Our accounting-office say that they already claimed for refund of the VAT, but they never asked for the custom and shippingdocuments. We got these dokuments from the shippingcompany 3 weeks ago, but our accontant say that they sendt the claim for refund in november. Know i can understand why we never get the money back(VAT).

I have a feeling that this accountingpeople dont know what they are doing. Have to add that we live way out in the bonies in Ubon so we maybe cannot excpect people to know to much about export-buisness here.

[CWMcMurray]

However, your supplier in Thailand will have added 7% VAT to their invoices to your Company, so you have already paid this to your supplier here, who in turn has paid it to the Thai Revenue Department.

And if your suppliers are outside of Thailand then the VAT was charged to you during customs clearance at the time of import of your raw materials. You can also claim VAT Refund for this as well...

[puipuitom]

We have a small company that export som clothes to Europe in small scale. Our accounting-office say that we have to put 7% VAT on the invoice when we send it to our customer. Then they say that we have to apply for refund of the VAT. Can that be rigth? If our customer pay the VAT, then he should ask for refund, ore if we ask for refund, we have to pay the VAT back to our customer? For me this dont make sence. I cannot believe that a customer in Europe have to pay VAT to Thailand, and then when he sell the clothes in Europe i'm sure he have to put his countries Vat on the clothes. So you pay VAT to two countries for the same clothes?

Somebody know about this?

EVERY accountant can tell you: if you can prove by CUSTOMS documents your product is exported, you can claim the paid VAT back ( or compensate with VAT you have to pay to the local tax rev office , when you received more VAT as paid )

Only when YOUR supplier delivers FOB / FAS / in customs warehouse, so custom wise seen 'outside of Thailand' YOUR supplier cannot charge YOU VAT. ( ask your overseas freight forwarder )

So, when YOU buy at a local factory, ship out per .. post bag, sorry: you are charged VAT, and no custom proof it is exported. YOUR overseas customer has to pay the agreed price. How you come at .. for instance Euro 25 / piece is YOUR problem. But YOU cannot charge YOUR overseas customer VAT.

any questions: info at thaitrade dot nl.

[puipuitom]

Donot forget: YOUR financial administration have to be approved by the Tax Rev Office, need to have an export licence FOR THESE products, AND the VAT amount to claim back must be above a certain level.

Why so many Thai's donot know ? No idea ? Why you think so many Japanese, Taiwanese, Koreans have their own staff ..

Edited January 18, 2009 by Thai Trade Service

[raro]

I have a feeling that this accountingpeople dont know what they are doing.

this pretty much sums it up! P Bronstone is correct, upon exports no VAT on the invoice. VAT applies only for trade within the same tax area (usually = country).

[anthoma]

Here is what we did.

We bought 2000 yards with fabric in a factory in Bangkok. We payed 260 000 baht for this incl. 18 000 bath in VAT. Then we hired som people to cut and sew the clothes. The shippingcompany took care of everything with shipping. We dont have our one exportlicense, but we have registered a company for exporting, and also registered for tax and VAT. We got the shippingdocuments including customdocuments from our shippingcompany. When we calculate what we payed for the fabric , for the sewing, shipping and add our profit, we make an invoice for the european company. My question was if we had to add 7 % VAT on that invoice and i understand that the answer is no.

About the 18 000 bath our accountingpeople say they already applied for refund, but they never asked for the customdocuments. If we get this 18 000 bath back ore not is not very important (off cource it would be nice) , but i was afraid that i had to add 7% VAT on our invoice.