Vat Charged On Monthly Apartment Rent?

[Daren]

Just moved into my apartment at the beginning of this month and I received my bill for next month under the door yesterday. It has all of the charges itemized - rent (which is broken into two sections??), water, electricity and parking. Then at the bottom - subtotal, VAT (324B) and then the total. I was not told I would have to pay tax on my rent and I've never even heard of such a thing! Value Added Tax on your home?? <deleted>?

Have you heard of this practice, or am I being taken for a ride? Why wasn't I charged (or told about) this on the first month's rent when I moved in? The building manager seem very nice and helpful so far, so I don't think she would be trying to hide anything from us. I just don't get it.

- Baffled in Bangkok

[chiang mai]

I'm guessing here but is it a serviced apartment? If so, I can see how VAT would be charged.

[Daren]

Nope, not serviced. Just a simple 1 bedroom place on Petchburi Rd. There is a pool and fitness room upstairs but surely that woudn't be it... would it?

[Daren]

Just found this info about VAT in Thailand... and I'm still confused why it's on my bill.

VALUE ADDED TAX (VAT)

The Value Added Tax (VAT) is generally imposed to goods and services supplied in or imported into Thailand. VAT includes municipal tax, which is charged at the rate of one-ninth of the VAT rate. Under the this tax regime, value added at every stage of the production process is subject to tax. This tax affects: Producers, providers of services, wholesalers, retailers, exporters and importers. A zero per cent rate applies to certain businesses, for example, the Export Of Goods Or Services, international transportation by sea or air, and the sale of goods and services to United Nations-related organizations. The trader will charge VAT on the sale of goods or provision of services to the consumer. The businesses which are excluded from VAT subject to specific business tax, businesses necessary for maintenance of life and social welfare (i.e. health care services, educational services, domestic transportation, sale of unprocessed agricultural products), cultural services, religious and charitable services. Traders who do only zero-rated supply business will not be required to collect VAT on their supplies, but can refund all VAT paid for purchase of goods and services from others. Services provided by traders residing abroad and utilized in Thailand are regarded as being rendered in Thailand and subject to VAT.

The VAT payer is required to file a monthly VAT return and pay the tax monthly, on or before the fifteenth day of the following month.

Failure to register as a VAT payer, file a VAT return, or issue a tax invoice to a customer, is subject to a penalty of twice the amount of the tax due. A monthly surcharge of certain percentage for failure to pay the VAT is levied on the tax due. In addition, punishment for noncompliance with VAT regulations allows for a maximum punishment of imprisonment up to seven years and a fine of up to Baht 200,000.

[chiang mai]

It looks like you've got all the ammo you need there, go ask the manager for his VAT number and if he doesn't give it, take the matter up with the VAT office - either he's charging and paying VAT legally or he's not, you'll soon find out.

[fredob43]

Ive rented several flat's I know that they have to pay tax. On the monies they get for rent but Ive never been or heard of any one paying vat. Best of luck.

Edited April 25, 2010 by fredob43

[PattayaParent]

VAT is already included in the government utility bills so they shouldn't be charging you VAT on those costs.

[trajan]

in a rental situation, it is common to have two agreements (a lease agreement and a separate service agreement).

on the lease agreement, the landlord usually wants to minimize his 12% land and house tax levied on the rental income (assuming he/she actually pays that tax at the district office---many dont) and will thus want to minimize the lease rental amount under the lease agreement.

on the service agreement, 7% VAT is levied (but again, this assumes the landlord is registered in the VAT system---if not he/she is just pocketing the money)....

[kennalder]

Have you tried the tourist police? I know you are not a tourist, but if you are being ripped, they might help anyway.

[NADTATIDA1]

Tourist police??

For being charged VAT on an apartment!

[Daren]

Hey folks, thanks for chiming in with your input!

I never signed a service contract, just rental agreement - as far as I know. So I will certainly pleasantly inquire about their VAT number and follow up on that one.

Cheers!

[RAZZELL]

324 baht eh...???

What a cheek

RAZZ

[powderpuff]

Your landlord is trying it on. He has some nerve. Get in his face.

[StateSix]

Is the VAT in addition to the agreed rental price? If not, what is the issue?

If it is, does your contract state that your rent would Bt xx, and that you would be charged VAT on top? If not, then point that out to them.

My apartment just states I have to pay Bt xx per month. If there's VAT to pay then it's been factored in already.

I know our office rental is subject to VAT, but again that's been factored into the agreed rental price already.

[PhiPhi]

Hi Daren,

I think because as one poster pointed out the owner is liable to a land tax based on rental income so what they do is try and keep the rental portion of the billing as low as possible.

You will find that your rental bill is split between rental + usually furniture then utilities, etc. so they will then charge you VAT on the furniture portion of the rental, good for them not so good for you.

So if one part of your bill is 4,627 baht this is most probably for the furniture rental, it's quite common practice but they are wrong not to inform you of the full non-variable monthly costs upfront, though you will probably find it buried away in the rental agreement.

Steve

Bangkok Home Finders

[Daren]

That was a very helpful post, Steve. Thanks!

[robblok]

VAT is already included in the government utility bills so they shouldn't be charging you VAT on those costs.

If its anything like Dutch VAT then they should. (only if you pay more as what they pay the electricity company)

That is the reason why its called Value Added Tax. I could try to explain the whole VAT system but take it from an accountant that if they charge you more then the normal costs they will have to charge you VAT over the part they charge you more for.

This is in Thailand only the case if the owner is vat liable and there are many exceptions to this. (usually small businesses)

[powderpuff]

Unless your lease mentions VAT on top he needs to pay it out of his end.

No limit to the scamsters in this country.

[Daren]

Well, I've gotten to the bottom of the issue - the VAT was written on the bottom before the total, but it was included in the rent after all. I didn't subtotal the rent and util's and just assumed it was being tacked on, as that's how it appears on the invoice. However, it is included in the cost of rent, so it's not a huge, I guess. Seems weird that I would be charged VAT at all though as I don't see renting an apartment as service!

Any way, thanks for all your input, folks!

Edited May 2, 2010 by Daren

[onlycw]

We are renting a condo here and there's no vat added: www.pgp.co.th If no vat was charged the previous (first) month, fight it.