In the UK, when my UK VAT registered company completes a job (in the UK for a UK customer), I issue a "Tax Invoice". When I get paid by the customer, I do not issue any form of receipt. I just stamp "paid" plus the paid date on my office copy of the "Tax Invoice", and this is all that the UK Inland Revenue requires as proof of the transaction.

I have learned (been told) that it is not the same in Thailand for my Thai company (also VAT registered).

Can someone who definitively knows, tell me what PRECISELY needs to be issued to my customers here in Thailand, as precisely required by the Revenue, as my accountant seems to change their mind periodically.

All my customers receive 30 days credit.

Currently, I issue an "Invoice" (showing Net total, VAT amount & Gross Total) upon completion of the job.

When the customer pays, I have to also then issue a "Tax Receipt" (showing same Net total, VAT amount & Gross Total).

The accountant (she) has suggested (upon receipt of payment), I should issue a paper bearing the words "Tax Invoice/Tax Receipt"

I told her that a tax receipt is a "Tax Receipt" not a "Tax Invoice". An invoice is a "request for payment" not a receipt.

And also in Thailand, a "Tax Invoice", as a request for payment, means nothing to the Revenue as the only thing they are interested in is a "Tax Receipt".

Ideally, upon delivery of a job, I would like to issue a "TAX INVOICE", tell the customer to write "paid" on their copy when they pay it, and then use that same paper as their official "Tax Receipt".

This is how it works in the UK, but writing "Paid" on a "Tax Invoice" is not acceptable here under Thai accounting law, or am I missing something.

Thanks in advance for any clarification anyone can give me.

You have to issue a Tax Receipt and writing the words Tax Invoice / Tax Receipt is the way to go. Issue the Invoice for payment and the above when paid. Thais like lots of paperwork and cutting down trees!

You have to issue a Tax Receipt and writing the words Tax Invoice / Tax Receipt is the way to go. Issue the Invoice for payment and the above when paid. Thais like lots of paperwork and cutting down trees!

Thanks Slipper,

I still can't get over the "Tax Receipt" having to have the words "Tax Invoice" on it.

A "Tax Receipt" is NOT an invoice, it is a receipt! If I issue a "Tax Invoice" after payment, the customer doesn't know what to do with it and demands a "Tax Receipt".

Also, the Revenue do not recognise a "Tax Invoice" for tax/accounting purposes!

The accountant says a "Tax Invoice" is of no use to them, they need "Tax Receipts". Then they ask me too add the words "Tax Invoice /" in front of "Tax Receipt" on my receipts

Do the words "invoice" and "receipt" get confused in Translation from Thai by any chance?

EDIT: Punctuation

Edited July 2, 201412 yr by Marvo

Your "Invoice" should be clearly Headed:

ใบแจ้งหนี้ / ใบกำกับภาษี

Which basically translates as "Invoice / Document to regulate VAT Tax".

This is the only Document which your Customer can use to reclaim - or record - the VAT he has incurred in the transaction with the Thai Revenue Department and should be issued by you immediately the cost of Goods or Services have been supplied / contracted to supply to your Customer.

Any other Document you issue - such as a Receipt which you might issue after payment has been received by you - is irrelevant to the Thai Revenue Department, simply because when you make a Sale the VAT payable to the Revenue Department is payable by you by the 15th day of the following month; they don't care how many months of Credit you allow your Customer, you pay VAT on the transaction by the 15th of the month following the sale.

Patrick

Edit - to add after Marvos Post above.

The Thai for "Receipt" is ใบเสร็จรับเงิน which, again, basically translates as "Document finalising receipt of payment" - and your Accountant is not really properly explaining to you what ใบแจ้งหนี้ / ใบกำกับภาษี means, it's in no way a "Receipt" it's a Document required by the Revenue Department to record the Sale and what VAT is due on the transaction.

Patrick

Edit to add again - sorry!

I simply put the Thai on all my Invoices "ใบแจ้งหนี้ / ใบกำกับภาษี" because their is simply no short translation in English - and this Document with only the widely understood Thai script will always satisfy your Customers Accounts Department!

Patrick

Edited July 2, 201412 yr by p_brownstone

p_brownstone, thanks so much for taking the time to give all that great info. That's going to help a lot!

The VAT timing you quote is exactly as I understood it.

My accounting company are reclaiming my VAT on purchases correctly, BUT (big BUT), they are calculating VAT on sales, owed to the Revenue, based on the date money is paid by customer (= witholding tax certificate date). That is the matching date I have been told it is important to be on the customer's "Tax Receipt", and it is by the 15th of the following month that my accounts Co. submit my VAT payment.

We have not been following the "by 15th of month after supply/invoice of goods" rule. (Sometimes we do not get paid for 90 days).

Is there a VAT "cash accounting" system here in Thailand as in the UK?

Oh, last quick question, if you know the answer...

Purchase receipts... can I reclaim the VAT on (mislaid) purchase receipts that are 2 or 3 months old, or MUST they be "used" by the 15th of the month after the actual month in which they are issued/dated?

Thanks again.

Edit: add last question

Edited July 2, 201412 yr by Marvo

p_brownstone, thanks so much for taking the time to give all that great info. That's going to help a lot!

The VAT timing you quote is exactly as I understood it.

My accounting company are reclaiming my VAT on purchases correctly, BUT (big BUT), they are calculating VAT on sales, owed to the Revenue, based on the date money is paid by customer (= witholding tax certificate date). That is the matching date I have been told it is important to be on the customer's "Tax Receipt", and it is by the 15th of the following month that my accounts Co. submit my VAT payment.

We have not been following the "by 15th of month after supply/invoice of goods" rule. (Sometimes we do not get paid for 90 days).

Is there a VAT "cash accounting" system here in Thailand as in the UK?

It makes absolutely no difference if it is a "Cash" sale or if you give your Customer 90 Days Credit, 180 Days Credit, whatever. As I said above the Revenue Department does not care when YOU receive payment from your Customer, what matters to them is the date of the actual Sale and you MUST issue your official "ใบแจ้งหนี้ / ใบกำกับภาษี" that same day and include the Sale and VAT information when you submit your VAT Return within the 15th of the following month.

If your Accountant is not recording the transaction in your VAT Return until you have actually been paid then they are most definitely wrong - and if the Revenue Department find this there will be repercussions and fines involved.

Also, "Witholding Tax" is entirely different from "VAT". Witholding Tax is due on "supply of Labour" (NOT on supply of Goods too) and will be deducted by your Customer at the time he actually pays you - and he should then give you a "Witholding Tax Receipt" which you use at the end of the Financial Year to partly offset any Corporate Tax due from your Company.

For example :

If you supply equipment to your Customer and charge him a Fee for, say, installation :

Your Invoice would read something like :

1 Unit Sliding Glass Door Baht 10,000.-

Installation Baht 2,000.-

Total 12,000.-

VAT 7% 840.-

TOTAL Baht 12,840.-

And your Accountant MUST pay Baht 840.- to the Revenue Department by the 15th of the following month - regardless of whether you have been paid or not; even if you have not delivered the Door or installed it (for example if you have to Order it from your Overseas Supplier but are demanding that your Customer pays first as a form of security, you have to Invoice it and pay the VAT the next month).

When your Customer pays you he will give you Baht 12,780.- which is Baht 12,840.- LESS Baht 60.- .... the Baht 60.- being 3% Witholding Tax on the Baht 2,000.- you charged for Installation; he should also give you a Witholding Tax Receipt for Baht 60.- which you retain and use as described above .

Patrick

Edit : to answer the last question.

You can only reclaim VAT on Purchases within 2 months of the actual Purchase, however if you cannot reclaim the VAT within that timeframe you simply include the unclaimed VAT in your Cost of Sales, so it's not actually a loss to the Company.

Patrick

Edited July 2, 201412 yr by p_brownstone

Thanks again. One last thing confuses me re your example Patrick.

I have to "invoice" my customer for his "security deposit", but the goods and services have not yet been supplied. The Revenue Dept. state VAT should be charged at time of supply.

Should VAT be charged on deposits taken, which could be way ahead of supply?

Any clarification would be most appreciated.

Cheers,

Marvo.

Thanks again. One last thing confuses me re your example Patrick.

I have to "invoice" my customer for his "security deposit", but the goods and services have not yet been supplied. The Revenue Dept. state VAT should be charged at time of supply.

Should VAT be charged on deposits taken, which could be way ahead of supply?

Any clarification would be most appreciated.

Cheers,

Marvo.

Do you have a Link to that reference on the Revenue Department website or somewhere?

I often demand a Deposit - sometimes even 100% Cash with Order - either from Customers I do not deal with often or if someone is buying a special piece of equipment which, if I ordered it from my supplier and the Customer later changed his mind, I would have difficulty selling to someone else.

I every case I issue an Invoice including the VAT and report it in my next months VAT Return.

I am pretty sure my approach is correct but I may be wrong!

Patrick

Thanks again. One last thing confuses me re your example Patrick.

I have to "invoice" my customer for his "security deposit", but the goods and services have not yet been supplied. The Revenue Dept. state VAT should be charged at time of supply.

Should VAT be charged on deposits taken, which could be way ahead of supply?

Any clarification would be most appreciated.

Cheers,

Marvo.

Do you have a Link to that reference on the Revenue Department website or somewhere?

I often demand a Deposit - sometimes even 100% Cash with Order - either from Customers I do not deal with often or if someone is buying a special piece of equipment which, if I ordered it from my supplier and the Customer later changed his mind, I would have difficulty selling to someone else.

I every case I issue an Invoice including the VAT and report it in my next months VAT Return.

I am pretty sure my approach is correct but I may be wrong!

Patrick

Hi Patrik,

This link has the details of VAT needing to be charged and "time of supply" implications:

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

If a tax invoice is issued or a deposit is paid, then 5.1.1 would suggest that deposits should indeed contain VAT.