I've been trying to understand the VAT page here:

http://www.thaivisa.com/thailand_vat.0.html

But it's kind of difficult to put together, basically here's my situation:

Wife has a store (registered as a Thai partnership) which mostly exports, but also sells locally to Thai customers; probably 95% of all sales are exports.

The annually turnover now exceeds the 1.2M and requires the company to register for VAT.

I have some questions:

- It seems that the VAT page says Exported Goods are charged a "Zero Percent" VAT...? What does this mean? Just that you have to report the sale to the VAT department, but do not pay any VAT?

- After registering VAT would all Thai customers who came into the store have to pay an additional 7%, or would this have to come out of the profit?

The problem with this is that when selling to Thai customers the mark ups are so thin that subtracting 7% would result in almost no profit, and adding 7% would make the prices uncompetitive because all competition and suppliers sell cash in hand (off the books) and do not charge any VAT.

Any suggestions of how to make the VAT system work for me?

I think it's safe to say that registering for vat in itself is not supposed to change any pricing of your products.

It merely enable/require you to charge (and pay) the 7% vat for your (domestic) sales, but also deduct the 7% vat on your purchases with (local) suppliers thus in the end it should all even out?

Additionally you should then be able to reclaim the vat on all your purchases/expenses & perhaps able to come out as vat negative (getting more vat refunds than you pay in)

good luck!

I've been trying to understand the VAT page here:

http://www.thaivisa.com/thailand_vat.0.html

But it's kind of difficult to put together, basically here's my situation:

Wife has a store (registered as a Thai partnership) which mostly exports, but also sells locally to Thai customers; probably 95% of all sales are exports.

The annually turnover now exceeds the 1.2M and requires the company to register for VAT.

======================

Sir,you hae no problem, because 95% ofyour sales goes t Export.This means that your 'domestic sales' are far below the value where you would beome VAT-dutybound. My sugesion ? Go ad have your wife talk with oe of the IRS people about your specific situation. You will e happil surprised how helpfull they are: we did and saved a ton of head-aches and money taboot !

Like Nike says: "Just Do It !"

Cheers

JGK/Satahip

Why not opening a second company, one that sells locally and one that exports? Then keep for the local sales everything without VAT and for the exports you can claim the VAT back.

Why not opening a second company, one that sells locally and one that exports? Then keep for the local sales everything without VAT and for the exports you can claim the VAT back.

That's a very good idea, that hadn't even crossed by mind. I will definitely look into this option.

Good advice... I doubt your local sales company will reach the VAT registration requirement for quite some time (if ever), so you may never need to charge VAT for your local business.