Vat For Software Exports And Iphone Apps

[PhilsterBKK]

Hi,

I have been exporting hardware for the last year and I know how to get the custom's receipt so we don't have to pay the VAT.

My question is we are getting into software sales. We could export the software by Fedexing a CD, but I am wondering how to do it PROPERLY by just billing the customer and having them download the software.

The reason why I am asking this is we are going to get into ANDROID and IPHONE apps in the next year and eventually most of our sales will be through the Google and Apple stores.

Has anyone done this before ? If so how do you satisfy the government so you don't have to pay VAT on an export sale of software. Also is this kind of sale considered a service or a product ?

Thanks,

Phil

[Sunbelt Asia]

Thai law requires that if it is unsure if your consumers are Thai nationals or if they are based in Thailand or elsewhere then you will need to pay VAT. So, for example, if you were to sell DVDs and export them all overseas, with it obvious there are no sales in Thailand, then you could avoid paying the VAT.

However, because people will be downloading online (or over their mobile) then they could be anywhere in the world, including of course, Thailand and so the government does require you or the consumer to pay the 7 % VAT.

“(2) provision of services performed in Thailand and used in a foreign country in accordance with the type, rule, procedure and condition prescribed by the Director-General, 2

2N.DG.VAT.No.105

provision of services performed in Thailand and used in a foreign country shall include provision of services performed in Thailand for the production of goods in Customs free zone for the purpose of exportation and the provision of services performed in such zone for the production of goods for the export purpose;”

[sunbelt][/sunbelt]

[mccw]

Just theorising; but couldn't you base your dealings with apple/ google in a tax haven such as the caman islands and develop the product under your existing company in Thailand. The Thai company could then "sell" the product 1 time to the Caman company at a break even cost, so no Thai tax. Or if you want to be generous record a marginal profit on the sale and pay a small tax to keep the Thai tax collectors happy.

[PhilsterBKK]

For the record, my Thai auditor said it is OK and I invoiced and received payment via a T/T. No problems yet, but I will post if I run into anything.

[innerspace]

If unsure release 2 versions of each app.

1 available in thailand itunes or play store and the other available in the rest of the world.

Tiny bit more work in maintenance and updates but puts you in a clear and simple position for vat.

Or use a tax haven and eliminate the issues.