Vat refunds in thailand

[Luma]

FYI: (A question asked at the superior Phuket Gazette website, with answer from the Thai Revenue Department!)

---- FARANG QUESTION: ----

Every six months we (like all VAT-registered Thai companies) are eligible for a VAT tax refund. This is stated by Thai law and it is, I assume, how it is supposed to work.

However, every time we request a cash refund of our VAT, we get an “offer we can’t resist”. The Revenue Department suggests we should let them keep our VAT in a kind of “trust hold”. We can then deduct the forthcoming month’s VAT from the funds held by the Revenue Department.

Failure to comply with this generous offer is likely to result in monthly visits from the Revenue Department to scrutinize our accounting records.

A while ago we requested that our VAT be refunded as we needed it to bolster our cash flow. Up to now we have still not received this money. This is surely against Thai law. No other country with a VAT system (that I know of) has any problem refunding it.

VAT is simply a balance loan to the government that the government is obliged to repay to us if it is overdrawn. Failure to do so would be tantamount to embezzlement.

My questions are, is racketeering part of the Revenue Department’s practices? And if we can’t rely on the government agencies to practice Thai law, who can we rely on?

-- Michael

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ANSWER FROM THE REVENUE DEPARTMENT:

Thursday, March 6, 2003

“I can guarantee that there is no racketeering or corruption within the Revenue Department. Normally, we prefer VAT payers to let us keep their VAT in the form of “trust hold” which is quite convenient for both them and us.

But if a VAT payer wants a refund in cash, we are willing to pay it. However, the process usually takes some time because we must review the business’s operation and documentation. We need to make sure that it is operating legally.

If you are confident that you are doing business legally and have been waiting for refund for a long time, you can contact the Revenue Department direct. We will follow up the matter for you. ”

Thursday, March 6, 2003  Orrathai Mahatamtip, Senior Official, Phuket Provincial Revenue Department.

[PETER THE EATER]

Ha Ha Ha Ha Ha Ha Ha Ha

I believe them!

[jayrockwell]

We export everything we make, and get our VAT back every couple of months. But we need to take our tax invoices every month for inspection.

Now we are an established company we are going over to a yearly inspection, but money still given back to us regularly.

We deal with a quieter tax office (I'm the only farang registered), so I think it's easier.

James