Vat when importing or when selling?

[yankee99]

Let say you import a container of widgets from italy in to thailand. The container has 100 widgets with a total value of 100,000 baht. We will assume there is no duty so the total is still 100k.

With a legal company registered with customs will vat be collected when the container is in port? if yes

When you sell your widgets can you deduct the vat already paid? example: sell the widgets for 200k baht only pay vat on 100k as vat on the first 100k was paid at the port.

[Khun Jean]

here you go:

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

[onthemoon]

When the container arrives and you do the import customs clearance, you have to pay the VAT.

When you sell the goods, you have to collect VAT from your customer. You have to pay this VAT to the Revenue Department, but you can deduct the VAT you already paid when importing.

Basically when you buy any goods, you pay a VAT to the seller. (Only in case of import you pay directly to the government, but the idea is the same). When you sell the goods, you collect the VAT from the buyer. You only remit the balance between the two amounts to the RD, i.e. you pay tax only on the value that you have added. This is the idea and the whole secret of VAT, very much different from a GST.

[yankee99]

When the container arrives and you do the import customs clearance, you have to pay the VAT.

When you sell the goods, you have to collect VAT from your customer. You have to pay this VAT to the Revenue Department, but you can deduct the VAT you already paid when importing.

Basically when you buy any goods, you pay a VAT to the seller. (Only in case of import you pay directly to the government, but the idea is the same). When you sell the goods, you collect the VAT from the buyer. You only remit the balance between the two amounts to the RD, i.e. you pay tax only on the value that you have added. This is the idea and the whole secret of VAT, very much different from a GST.

Thanks for the info and the RD website. I understand in regards to subtracting what I've already paid.

I am a little confused at the end of your post. Please correct me if i am wrong. What you are saying is if you buy for 1000 pay the tax 7% sell domestically for 1100 you only collect and pay (or deduct from what you paid) on the difference of 100 which is the value added?

I have paid vat here on retail purchases and it always been on the full amount.

[onthemoon]

When the container arrives and you do the import customs clearance, you have to pay the VAT.

When you sell the goods, you have to collect VAT from your customer. You have to pay this VAT to the Revenue Department, but you can deduct the VAT you already paid when importing.

Basically when you buy any goods, you pay a VAT to the seller. (Only in case of import you pay directly to the government, but the idea is the same). When you sell the goods, you collect the VAT from the buyer. You only remit the balance between the two amounts to the RD, i.e. you pay tax only on the value that you have added. This is the idea and the whole secret of VAT, very much different from a GST.

Thanks for the info and the RD website. I understand in regards to subtracting what I've already paid.

I am a little confused at the end of your post. Please correct me if i am wrong. What you are saying is if you buy for 1000 pay the tax 7% sell domestically for 1100 you only collect and pay (or deduct from what you paid) on the difference of 100 which is the value added?

I have paid vat here on retail purchases and it always been on the full amount.

You buy 1000 and pay the VAT of 7% (=70) to the seller (if you by from a local company).

You sell for 1100 and you bill 7% (= 77) to your customer. Since you bill on behalf on the RD, you have to pay these 77 to the RD. However, you can deduct the amount of 70 you have paid to the seller (which he collected on behalf of the RD). Hence, you pay only the balance of 7 to the RD.

The final user or consumer will not resell the goods. Let's say your customer (who you collected 77 from) resells to a consumer at 1500. He adds 7% (= 105), which the consumer has to pay. The consumer is not reselling, so he cannot deduct this from anything. The consumer always pays the full burden of the VAT, while the companies in between only pay for the value they have added.