Hi,

This is the first time I am billing someone overseas, do I still charge them the VAT?

If you ship through customs (air or sea freight) with proper export documentation as evidence that you have exported the goods you do not charge VAT.

If you ship by mail without customs declaration then you have to charge VAT.

The EMS slip or postal customs declaration forms do not qualify as evidence for the revenue department that you have actually exported the goods.

opalhort

I am just charging someone for a website design

I am just charging someone for a website design

If you run the charge through your VAT registered company then yes you'll have to add VAT.

If you can make all billing and transactions private (outside company books) then no need for VAT.

opalhort

Technically, in so far as the service you are providing is rendered in Thailand, it is subject to VAT. Obviously, if it is not done through a VAT registered company then whose to know.

VAT is exempt for services rendered to overseas customers. I'm slightly worried with a few posters suggesting that you should be charging VAT, as if that was the case I need to fire the accountant

Further to that I've just spoke to the accountant and we do not pay VAT but have to pay 15% withholding tax. What a bummer!

fire your accountant

for services rendered to overseas, you issue a "debit note" instead of an invoice. No VAT. Don't ask me why, but it works well for me for many years.

VAT is exempt for services rendered to overseas customers. I'm slightly worried with a few posters suggesting that you should be charging VAT, as if that was the case I need to fire the accountant

fire your accountant

for services rendered to overseas, you issue a "debit note" instead of an invoice. No VAT. Don't ask me why, but it works well for me for many years.

Might I suggest you both consider firing your accountants

1) If you're above the minimum VAT base (THB 1.2mio-ish ) and your goods are not exempt from VAT, they are normally subject to VAT at 10%. The good news is this has "temporarily" been reduced to 7% for several years now.

2) Certain goods are zero rated.

3) Generally as you noted, if services performed in Thailland are for a service user in a foreign country, AND the result of the work is used entirely in a foreign country then they would be charged at 0%. It is the last bit that usually gets omitted by many people including accountants.

In the case of websites, the Thai revenue decided in their finite wisdom that because websites would also be used by people in Thailand then they are not entirely in a foreign country. Hence they are subject to VAT. In theory as the service will be partly used in Thailand you allocate 7% to the Thai part and 0% to the overseas part. Unfortunately as there are no guidelines it's likely they would expect 7% on all of it.

This was the case in 2004. This was first hand experience with the VAT inspectors quite keen on the area - fortunately we had our house in order It might have changed since then... as I continued wandering after that...

Price Waterhouse Coopers used to publish a book called the "Quick Thai Tax Guide". There was a similar example in there for advertising, which laid out the rule very clearly.