my Thai wife has started an on line shop . At what point does she need to register and start paying tax, and is vat in thailand calculated by deducting tax paid on raw materals from tax on final seling price

VAT is separate from personal income and corporate income tax and must be paid once her revenue reaches more than 1.8 million baht. If she does not have sales over this amount then she does not need to register for VAT but as soon as it does hit 1.8 million baht she must register for VAT.

Assuming she does not wish to hire you as an employee and provide you with a work permit then she can register a simple sole proprietorship at the District Office and then apply for an e-commmerce permit from the same office.

VAT is Value Added Tax. An example would be if say you opened a restaurant business.

You buy raw materials (rice, vegetable, poultry) there is no VAT added, but if you buy a stove then there is. If you buy a stove for 100,000 Baht, your supplier will impose a VAT of 7%. So you would be paying 107,000 Baht

When you are selling your food at 100 Baht per plate, If you are listed in the VAT system, then you would eligible to add VAT of 7% so your customer pays 107 Baht per plate.

Each month you will have to file your monthly VAT for the VAT that you paid (to your suppliers) and the VAT collected (collecting from your customer)

They (VAT Paid and VAT Collected) could be used to offset each other. But if your collection is more than what you have paid, then the excess amount will need to be submitted to the Revenue Department. If you paid more than you collect, unfortunately it will be difficult to get the money back from the Revenue Department , it is normally kept as a creit on VAT with the Revenue Department.

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