Vat - Gross Income? Total Revenue?

[kohtao]

I run a travel agency which requires me to take large payments for guests. As an example I might take a payment of 100000 THB from a guest but my commission might actually be only 10000 THB or less. If I am VAT registered am I then supposed to pay VAT out of 100000 THB or 10000 THB?

My current accountant have adviced me that since my annual income does not exceed 1,8 mill. I am not liable to pay VAT. However, I have now gathered from searching the net, that my gross income does indeed exceed 1,8 mill. - if you consider all payments such as above income (the large payment) and not just the actual commission. Can anyone answer this question as I do not mind paying VAT if required and since I am quite frustrated with my accountant's anwers.

[~G~]

I run a travel agency which requires me to take large payments for guests. As an example I might take a payment of 100000 THB from a guest but my commission might actually be only 10000 THB or less. If I am VAT registered am I then supposed to pay VAT out of 100000 THB or 10000 THB?

Out of 100000. Your profit is irrelevant to VAT calculations.

My current accountant have adviced me that since my annual income does not exceed 1,8 mill. I am not liable to pay VAT. However, I have now gathered from searching the net, that my gross income does indeed exceed 1,8 mill. - if you consider all payments such as above income (the large payment) and not just the actual commission. Can anyone answer this question as I do not mind paying VAT if required and since I am quite frustrated with my accountant's anwers.

Regardless of the amount, AFAIK your company needs to be VAT registered in order for you to get a work permit.

[kohtao]

My lawyer and accounting company never informed me of this.

[Digger]

As I recall when working for a large travel related company in Thailand, they also showed their income in the accounts, not the revenue passed through to the ultimate supplier e.g airlines, hotels etc. However I might be out of touch as I was never closely involved in this - just saw the balance sheets when I was going for my work permits. For a travel agency, the revenue is not strictly yours, its the principals, hence this seems to be quite legit but i would suggest you enquire with a decent accountant. Incidentally again as far as I am aware, VAT is not chargeable on lots of travel related expenditure such as airline tickets.

Not much help I am afraid, but I would tend to agree that you are not considered a seller in the true understanding of the word. Should be quite simple to clarify - lots of travel agencies, insurance brokers etc must be in the same position.

[~G~]

My lawyer and accounting company never informed me of this.

Simple. Call the Department of Employment (they issue the Work Permits), and ask them, "Can I get a WP if my company is not VAT registered???"

Bangkok :

Alien Occupational Control Division

Department of Employment

Ministry of Labour and Social Welfare

Mit - Maitree Road, Dindaeng

Bangkok 10400

Tel. : (02) 245 2745

http://www.thaivisa.com/289.0.html

[kohtao]

As I recall when working for a large travel related company in Thailand, they also showed their income in the accounts, not the revenue passed through to the ultimate supplier e.g airlines, hotels etc. However I might be out of touch as I was never closely involved in this - just saw the balance sheets when I was going for my work permits. For a travel agency, the revenue is not strictly yours, its the principals, hence this seems to be quite legit but i would suggest you enquire with a decent accountant. Incidentally again as far as I am aware, VAT is not chargeable on lots of travel related expenditure such as airline tickets.

Not much help I am afraid, but I would tend to agree that you are not considered a seller in the true understanding of the word. Should be quite simple to clarify - lots of travel agencies, insurance brokers etc must be in the same position.

Thanks a lot for your comments. Any travel agents out there who can give a fellow compatriot advice on this? Note: I have since posting this reply sought some more opinions, and one stated that as long as I can clearly show (I.e have invoices from the different hotel properties) then the amount which is looked at is the actual commission my company makes - not the full amount derived from the customer.