Vat Question

[jazzy]

I run a website business and have customer overseas. We are VAT registered, so should we be charging the overseas customer VAT for websites that are produced for them?

[junkofdavid2]

Personally, I don't (didn't) charge; and I passed a Revenue Dept. audit despite that.

Or rather, I charged VAT at a Zero % rate (0%) for 'services rendered in Thailand and utilized outside Thailand...'

Scroll down to Item 4.2 in this webpage:

http://www.rd.go.th/publish/6043.0.html

*I'm not your lawyer, so at your own risk though.

[Phil Conners]

What exactly is "rule, procedure and condition prescribed by the Director-General" ?

[junkofdavid2]

What exactly is "rule, procedure and condition prescribed by the Director-General" ?

That I don't know. But I just charged at zero Vat and stapled the provision onto the receipt; and passed the Revenue Dept. audit.

[jazzy]

Our accountants insist that we SHOULD be charging VAT on exports. I have heard that there is an exemption for things like websites where you MUST charge VAT but I can't find this ruling anywhere . . . any ideas?

[junkofdavid2]

Our accountants insist that we SHOULD be charging VAT on exports. I have heard that there is an exemption for things like websites where you MUST charge VAT but I can't find this ruling anywhere . . . any ideas?

DUH? Can't find the ruling anywhere?

Did you even try reading the link we sent in order to help you?

In any case, if your accountant insists on charging 7% VAT on exports of goods, then she is definitely a dumbo.

4.2 Zero Percent Rate

Certain activities are liable to VAT at the rate of zero percent. Those activities include:

- export of goods;

- services rendered in Thailand and utilized outside Thailand in accordance with rule, procedure and condition prescribed by the Director-General;

ONCE AGAIN, check the link I sent, which is from the Thai Government's Revenue Dept.

[Phil Conners]

^ I'm in the same condition having been informed by our accountant that we need to charge VAT on export of services. Saw the rules but it says ... "in accordance with rule, procedure and condition prescribed by the Director-General". Without knowing what those "rule, procedure and conditions" are it's not very useful.

Edited February 26, 2010 by Phil Conners

[worldfun]

Typical LOS 'rules.

Dare to use them to your own advantage (against run of the mill accountant advice) & you may or may not be successful in passing the audit depending on the 'mood' of the officer in charge of your case

Bit like VAT refunds - you may get something, but for sure not the full amount (7%)

[jazzy]

Our accountants insist that we SHOULD be charging VAT on exports. I have heard that there is an exemption for things like websites where you MUST charge VAT but I can't find this ruling anywhere . . . any ideas?

DUH? Can't find the ruling anywhere?

Did you even try reading the link we sent in order to help you?

In any case, if your accountant insists on charging 7% VAT on exports of goods, then she is definitely a dumbo.

4.2 Zero Percent Rate

Certain activities are liable to VAT at the rate of zero percent. Those activities include:

- export of goods;

- services rendered in Thailand and utilized outside Thailand in accordance with rule, procedure and condition prescribed by the Director-General;

ONCE AGAIN, check the link I sent, which is from the Thai Government's Revenue Dept.

DUH yourself junkofdavid2 . . . yes, I looked that link and had already seen it, but that information is outdated and not fully complete which is why i was asking.

Have spoken direct to Revenue Dept now . . . they say that all goods exported from Thailand are liable to VAT but currently at the rate of ZERO %, therefore VAT IS applicable and should be shown on Invoices but at ZERO %.

Additionally they have said (which is the information I was trying to find) that ANY goods or services that 'could' be used or 'seen' within Thailand MUST have VAT applied at 7%. That means if you are producing a website for a client for example, this 'could' be viewed within Thailand and therefore MUST have 7% VAT applied to it for overseas customers.

Before you start complaining and criticising and treating people like idiots junkofdavid2 (as it typical of most posters here on TV), make sure YOU know all the facts before flaming. In this case you are wrong.

Thanks for your help everyone else.

Edited February 26, 2010 by jazzy

[Phil Conners]

Additionally they have said (which is the information I was trying to find) that ANY goods or services that 'could' be used or 'seen' within Thailand MUST have VAT applied at 7%. That means if you are producing a website for a client for example, this 'could' be viewed within Thailand and therefore MUST have 7% VAT applied to it for overseas customers.

This is what I thought. And they want to be the hub of ... whatever ...

[TravelerEastWest]

Jazzy,

A great thread:

"Additionally they have said (which is the information I was trying to find) that ANY goods or services that 'could' be used or 'seen' within Thailand MUST have VAT applied at 7%. That means if you are producing a website for a client for example, this 'could' be viewed within Thailand and therefore MUST have 7% VAT applied to it for overseas customers."

The issue is not yet over - you cannot accept a Revenue departments interpretation of a law as a general rule. This is true all over the world not just Thailand. What law were they citing?

Also please explain more clearly about your accounting advice. Is your accountant a CPA with many years of specialized tax experience in this area and extensive education?

For a tricky tax question you need an expert not a bookkeeper or general CPA. This may cost a bit as you will probably have to visit an international Accounting firm and talk to a manager or partner in their tax practice.

Junkofdavid actually was giving you good advice and not that rude just abrupt. Keep in the mind the statement that zero percent VAT was charged and an audit was passed. If I were you I would PM him and offer to take him out to lunch and find out more information especially who is his accountant?

Not I do not know him - smiling.

Edited February 28, 2010 by TravelerEastWest

[junkofdavid2]

Our accountants insist that we SHOULD be charging VAT on exports. I have heard that there is an exemption for things like websites where you MUST charge VAT but I can't find this ruling anywhere . . . any ideas?

DUH? Can't find the ruling anywhere?

Did you even try reading the link we sent in order to help you?

In any case, if your accountant insists on charging 7% VAT on exports of goods, then she is definitely a dumbo.

4.2 Zero Percent Rate

Certain activities are liable to VAT at the rate of zero percent. Those activities include:

- export of goods;

- services rendered in Thailand and utilized outside Thailand in accordance with rule, procedure and condition prescribed by the Director-General;

ONCE AGAIN, check the link I sent, which is from the Thai Government's Revenue Dept.

DUH yourself junkofdavid2 . . .

Have spoken direct to Revenue Dept now . . . they say that all goods exported from Thailand are liable to VAT but currently at the rate of ZERO %, therefore VAT IS applicable and should be shown on Invoices but at ZERO %.

Before you start complaining and criticising and treating people like idiots junkofdavid2 (as it typical of most posters here on TV), make sure YOU know all the facts before flaming. In this case you are wrong.

Thanks for your help everyone else.

If you look at my quote above which YOU yourself quoted Mr. Jazzy, I in fact DID mention that it IS zero percent and that it IS therefore liable for Vat, as you yourself say in your latter post, which therefore actually doesn't contradict my earlier post in any way.

Okay, fine, you're not an idiot Mr. Jazzy, ... you're just more updated than the Revenue Dept. website, and you are incapable of reading quotes that you yourself quoted as above; which I presume is not your fault.

Regarding that I should know all the facts as you yourself suggest, it's not my job and that's why I earlier said that "at your own risk because I'm not your lawyer" (unless you were incapable of reading that too... don't worry, I presume it's also not your fault).

As travelerEastWest mentioned, I was just trying to be of help.

Unfortunately for you (but then I guess it's human nature), "help" seems to mean being nicey-nicey instead of being informative and blunt. In this case, you probably will find your accountants more helpful when they give advice the "local way" (pretend to know, and be very nicey-nice polite... with a smile ).

Again, despite your "counter-attack," I hope my little piece of information can be of even a little help to you (I'm not joking) and I wish you genuine success in your business and website despite my outward "communication style" which seems to affect the onion-skinned.

[junkofdavid2]

Junkofdavid actually was giving you good advice and not that rude just abrupt. Keep in the mind the statement that zero percent VAT was charged and an audit was passed. If I were you I would PM him and offer to take him out to lunch and find out more information especially who is his accountant?

Hi Traveler,

The reason why I seemed to let off "steam" (with the "DUH" remember?) is that I myself am frustrated that my accountant at the time, just like Jazzy's it seems, had no clue regarding these laws and that I had to do the research myself...

I attended the Revenue Dept. audit myself with my accountant acting more as a language interpreter.

However, the VAT issue never came up in the audit questioning and it passed the audit. If anything, that's the best piece of info I can give Jazzy... that I did it "this way" and it "passed"... I did it this way and I quoted the website in the submitted documents, and it was accepted by the Revenue officer... and if he does the same it's at his own risk ...end of story. If that info isn't helpful to Jazzy, he can pretend like he never read it and not raise it at all with his accountant; and I still hope he's successful.

.

Edited March 1, 2010 by junkofdavid2

[raro]

as I said in the other thread...for services invoiced abroad, issue a debit note and no VAT.

[TravelerEastWest]

Junkofdavid actually was giving you good advice and not that rude just abrupt. Keep in the mind the statement that zero percent VAT was charged and an audit was passed. If I were you I would PM him and offer to take him out to lunch and find out more information especially who is his accountant?

Hi Traveler,

The reason why I seemed to let off "steam" (with the "DUH" remember?) is that I myself am frustrated that my accountant at the time, just like Jazzy's it seems, had no clue regarding these laws and that I had to do the research myself...

I attended the Revenue Dept. audit myself with my accountant acting more as a language interpreter.

However, the VAT issue never came up in the audit questioning and it passed the audit. If anything, that's the best piece of info I can give Jazzy... that I did it "this way" and it "passed"... I did it this way and I quoted the website in the submitted documents, and it was accepted by the Revenue officer... and if he does the same it's at his own risk ...end of story. If that info isn't helpful to Jazzy, he can pretend like he never read it and not raise it at all with his accountant; and I still hope he's successful.

David,

Very interesting that you won the audit not your accountant. I misunderstood but am not surprised.

The building next to my wife's business has an in-house accountant who speaks English quite well and I enjoy talking to him. As best as I can understand it tax accounting in Thailand is a bit like a poker game.

If you hold steady with a poker face and calmly cite the law and you have a big pile of cash so that you can keep going you will usually win if you have the law on your side or even close to it.

Sadly with a typical small Thai business the audit can go like this: Yes I see you have a request for X baht VAT refund if you want 1005 we will have to audit your company from top to bottom over teh next month.

At this point the business agrees to a 90% refund and the tax man says ok.

However with large companies the business will typically say go for it use this office for your audit our books are clean and they get their refund 100%.

All over the world typically smart CPAs win over revenue agents.

[stingray]

Worked for a car exporter, years ago. They got fully wat refund, because the cars went to South Africa. VAT must be refund as the countries in Europe for example charge their own VAT, when importing.

[raro]

Worked for a car exporter, years ago. They got fully wat refund, because the cars went to South Africa. VAT must be refund as the countries in Europe for example charge their own VAT, when importing.

doesn't matter where the cars go to nor whether or not the destination country charges VAT. The sale is not within Thailand, therefore no VAT.

[chesternim]

If the website is educational there is no VAT - as education is exempt regardless of it being an export or sold domestically!

Better yet tho - you can subcontract through Hong Kong - have the HK company handle all sales - then you are not exporting anything!