Rent

[Wanraya]

I have lived in the same apartment for the last 18 months and have always paid 5600 baht rent + electricity + water.

On coming to pay my rent this week I was presented with a bill for 5992 baht + electricity + water. Whe I asked why I was told that VAT @ 7% had been added to my rent bill. I asked why this had just started to be added and was told that there was a new owner/manager of the complex and that she had told staff that vat @ 7% had to be added to all rents.

Is this a legitimate charge or just a scam?

[astral]

If the owner has enough turn over, he is certainly liable for VAT.

I suggest you get the water and electricity bills and pay them directly, then you will avoind the double VAT there.

[ProThaiExpat]

While I am no expert on vat, I got the impression from the following experience that vat is due on almost anything of value, whethr money changes hands or not.

In my 30 year lease with the Thai who owns my house, rent is recited in the document, it is offset by an equal mortgage payment, cancelling out any money transfer.

Notwithstanding this, the taxing authorities levied tax on the rent amount and after long negotiations, I ended up paying 10k baht up front on a thirty year lease where the lease payments were approximately 6k baht a month.

[Digger]

VAT is NOT charged on property rent, however it is charged on extra services such as Furniture lease and services lease. Many landlords have 3 rental agreements with the tenant covering the above 3 areas. Reason being that in law, 15% of the 'rent' is payable to the government, wheras on services and furniture, its not.

Sounds like a scam. Ask for a full VAT invoice made out to a company and the company address stating that you have a company and can therefore recover the VAT - the VAT receipt must be made out by the company or individual, show their VAT number and address with a company stamp on it to be legal. Odds are you will never get one, and I would suggest you say that until you get a correct VAT invoice/receipt you will continue paying the price without the VAT added.

[Digger]

While I am no expert on vat, I got the impression from the following experience that vat is due on almost anything of value, whethr money changes hands or not.

In my 30 year lease with the Thai who owns my house, rent is recited in the document, it is offset by an equal mortgage payment, cancelling out any money transfer.

Notwithstanding this, the taxing authorities levied tax on the rent amount and after long negotiations, I ended up paying 10k baht up front on a thirty year lease where the lease payments were approximately 6k baht a month.

<{POST_SNAPBACK}>

This probably refers to the 15% tax - its not VAT per say but an accountant would be able to advise you correctly, Unless they are considering it as a kind of hire purchase finance agreement for which VAT is payable, but pure property rental is VAT exempt, though taxed in other ways to the recipient but not the payer.

[Wanraya]

VAT is NOT charged on property rent, however it is charged on extra services such as Furniture lease and services lease. Many landlords have 3 rental agreements with the tenant covering the above 3 areas.  Reason being that in law, 15% of the 'rent' is payable to the government, wheras on services and furniture, its not.   

Sounds like a scam.  Ask for a full VAT invoice made out to a company and the company address stating that you have a company and can therefore recover the VAT - the VAT receipt must be made out by the company or individual, show their VAT number and address with a company stamp on it to be legal.  Odds are you will never get one, and I would suggest you say that until you get a correct VAT invoice/receipt you will continue paying the price without the VAT added.

<{POST_SNAPBACK}>

Thanks Digger. That information is most helpful.

[Digger]

VAT is NOT charged on property rent, however it is charged on extra services such as Furniture lease and services lease. Many landlords have 3 rental agreements with the tenant covering the above 3 areas.  Reason being that in law, 15% of the 'rent' is payable to the government, wheras on services and furniture, its not.   

Sounds like a scam.   Ask for a full VAT invoice made out to a company and the company address stating that you have a company and can therefore recover the VAT - the VAT receipt must be made out by the company or individual, show their VAT number and address with a company stamp on it to be legal.  Odds are you will never get one, and I would suggest you say that until you get a correct VAT invoice/receipt you will continue paying the price without the VAT added.

<{POST_SNAPBACK}>

Thanks Digger. That information is most helpful.

<{POST_SNAPBACK}>

And if you really want to turn the knife, indicate that you also need to deduct withholding tax at 5% of rental fee and 3% of services/furniture. Only risk with this one is that you may find yourself out on the street so keep smiling all through and then very difficult for the Thai to argue with you. Somehow I think you may find that the bill reverts to the old level as a 'special' favour just for you.