The Italian Restaurant Conspiracy In Chiang Mai

[Ulysses G.]

I don't know for a fact that this is true, but I have heard it from a number of sources.

The rumor is that practically all the better Italian Restaurants have gotten together and are going to start charging 10% for service and 7% for VAT (most of which will never be reported to the tax office) to increase their profit margins -and soon.

If they do this, you can be sure that every other restaurant in Chiang Mai will copy them and it will be a choice of paying it or learning to cook yourself.

I would really hate food prices to go up so drastically and I don't like to cook.

What to do?

Edited December 31, 2006 by Ulysses G.

[Rasseru]

I would really hate food prices to go up so drastically and I don't like to cook.

What to do?

Fast?

Any idea whether any of the 10% service charge will be used to compensate the staff, since one pays a service charge or leaves a tip, but never does both, so that now the staff who have been sharing the tips will now no longer be able to do so?

Put differently, any idea whether places that now charge a service charge, such as The House, share the service charge out with their staff?

[SamSipEt]

Boycott all Italian restaurants now as a preemptive strike.

Hit them before they hit us!

Other restaurants will, hopefully, see the damage done to the Italian restaurants and not copy this attempted rip off.

[Ulysses G.]

I would really hate food prices to go up so drastically and I don't like to cook.

What to do?

Fast?

Any idea whether any of the 10% service charge will be used to compensate the staff, since one pays a service charge or leaves a tip, but never does both, so that now the staff who have been sharing the tips will now no longer be able to do so?

Put differently, any idea whether places that now charge a service charge, such as The House, share the service charge out with their staff?

This is one of the things that I hate about these charges and forced tipping in general. The truth is that we hardly ever know what individual restaurant owners will do with these charges, but if you believe the serving staffs, it isn't often that much goes to them.

In Bangkok tourist areas, most of the restaurants have been doing this for a while, but, the restaurant keeps most of the 7% VAT and doesn't give their employees the service charge at all. If you want to thank your server, you end up paying twice.

Another trick is to charge a service charge as a matter of course and then give the employees a very low base salary so the customer is paying it all out of their pockets and the employer is paying almost nothing.

Instead of giving the waiter a generous tip you end up subsidizing a really lousy salary.

I am quite happy to leave Bangkok after a couple of days because of this type of thing. I hate to see this happening in Chiang Mai!

Edited December 31, 2006 by Ulysses G.

[Ulysses G.]

Boycott all Italian restaurants now as a preemptive strike.

Hit them before they hit us!

Other restaurants will, hopefully, see the damage done to the Italian restaurants and not copy this attempted rip off.

Wouldn't it be better to wait and see who tries it on, and only avoid these businesses?

[Jonson83]

Noooo,i need these Italian restaurants otherwise ill starve!

[fanciman]

Which italian restaurant in chiang mai does cheap, big, good portions of spaghetti?

Vegetarian ones!

Which part of town/how to get there?...

Some spaghetti sauces i have tried are not too good; like ketchup and some mushrooms

Generally speaking, the food in CNX is great!

Love that Amazing Sandwich baguette!

btw, where is a good pure veggie indian place?

[Casanundra]

This just sounds like Chiang Mai is taking on what is normal in many restaurants in Bangkok and is yet another reflection on how Thailand is evolving.

[Blinky Bill]

Which italian restaurant in chiang mai does cheap, big, good portions of spaghetti?

Vegetarian ones!

Which part of town/how to get there?...

Some spaghetti sauces i have tried are not too good; like ketchup and some mushrooms

Generally speaking, the food in CNX is great!

Love that Amazing Sandwich baguette!

btw, where is a good pure veggie indian place?

Strangely enough there are a number of good Thai restaurants in Chiang Mai.................

[Ulysses G.]

This just sounds like Chiang Mai is taking on what is normal in many restaurants in Bangkok and is yet another reflection on how Thailand is evolving.

...And which Italian restaurant do you own?

Edited January 1, 2007 by Ulysses G.

[mongoose]

The rumor is that practically all the better Italian Restaurants have gotten together and are going to start charging 10% for service and 7% for VAT (most of which will never be reported to the tax office) to increase their profit margins -and soon.

The costs to eat will go up when the costs of the imported foods go down (because of the strong baht).

If they do it, they will see me much less often.

[scottie dog]

I would really hate food prices to go up so drastically and I don't like to cook.

What to do?

Fast?

Any idea whether any of the 10% service charge will be used to compensate the staff, since one pays a service charge or leaves a tip, but never does both, so that now the staff who have been sharing the tips will now no longer be able to do so?

Put differently, any idea whether places that now charge a service charge, such as The House, share the service charge out with their staff?

This is one of the things that I hate about these charges and forced tipping in general. The truth is that we hardly ever know what individual restaurant owners will do with these charges, but if you believe the serving staffs, it isn't often that much goes to them.

In Bangkok tourist areas, most of the restaurants have been doing this for a while, but, the restaurant keeps most of the 7% VAT and doesn't give their employees the service charge at all. If you want to thank your server, you end up paying twice.

Another trick is to charge a service charge as a matter of course and then give the employees a very low base salary so the customer is paying it all out of their pockets and the employer is paying almost nothing.

Instead of giving the waiter a generous tip you end up subsidizing a really lousy salary.

I am quite happy to leave Bangkok after a couple of days because of this type of thing. I hate to see this happening in Chiang Mai!

It should be noted that the 7% vat should NOT cover the whole bill as not all the food is subject to VAT. No local food is subject to it and some imported food is also excempt. It should also be remembered that most establishments pay a "fixed" (as determined by the local VAT Office) Vat fee which they determine by visiting establishments and "estimating" the turn-over! The 7% should be accounted for when costing the individual meal.

[Blinky Bill]

The costs to eat will go up when the costs of the imported foods go down (because of the strong baht).

If they do it, they will see me much less often.

Huh? Please explain that one........

[mongoose]

The costs to eat will go up when the costs of the imported foods go down (because of the strong baht).

If they do it, they will see me much less often.

Huh? Please explain that one........

Yes, Bill, I ran two thoughts together, so not clear and perhaps off the mark, but it seems to me that the changes would increase the cost to eat (the cost we pay) by 10% plus 7% with propably some of that increase going into profit (not for sure but probably). Second, over the past year, costs for their imported stuff have likely gone down because of the strong baht, so more added profit. Plus recent menu price increases.

[Little Black Duck]

The costs to eat will go up when the costs of the imported foods go down (because of the strong baht).

If they do it, they will see me much less often.

Huh? Please explain that one........

Yes, Bill, I ran two thoughts together, so not clear and perhaps off the mark, but it seems to me that the changes would increase the cost to eat (the cost we pay) by 10% plus 7% with propably some of that increase going into profit (not for sure but probably). Second, over the past year, costs for their imported stuff have likely gone down because of the strong baht, so more added profit. Plus recent menu price increases.

That one got me Too..

I heard if you are turning over more than B1,500,000 by law you must pat VAT..Service charge is Optional..

[SamSipEt]

Boycott all Italian restaurants now as a preemptive strike.

Hit them before they hit us!

Other restaurants will, hopefully, see the damage done to the Italian restaurants and not copy this attempted rip off.

Wouldn't it be better to wait and see who tries it on, and only avoid these businesses?

Nah why wait? Avoid them all starting now its all over priced over hyped rubbish food anyway.

Stick to good old fashioned Thai food

[briley]

If anyone says "Plus Plus" I go elsewhere, Italian or not.

[Cyberstar]

If an establishment charges you for VAT, without submitting the exact VAT-amount to RD, it is doing fraud against the government (and you). One thing's for certain: if the establishment isn't VAT registered, there's no way it can submit the VAT.

There're only about two reasons why an establishment would be VAT-registered: 1) It is big enough to have a turnover of more than 1.8 mil (or the RD thinks it should have) or 2) The establishment is run by a foreigner who wants a workpermit.

I'd say it's fair enough for VAT-registered restaurents (at least of the latter kind) to charge the VAT because they aren't but acting as unvoluntary and unpaid taxcollectors for the government and they most likely would just love not to have the big competitive disadvantage of having to charge more to make same profit as their non-registered competitors. So if you enjoy the Italian meal and environment because the place is run by a real Italian, wouldn't it be a bit low not to support that exellent place to be run in the legal way?

But how many (Italian) restaurents are VAT-registered? Most certainly not any small Thai run restaurent and most likely not quite a few foreign run ones... but they might charge VAT anyway and put it in their own pocket.

Here's the way to distinquish the genuine VAT from the phony one: Any VAT-registered entity is required to "produce" these two items on request: a reciept on the restaurents letterhead stating the exact VAT-amount plus their VAT-certificate ... Well, acctually they're supposed to give you a proper receipt unrequested and have the VAT-certificate hanging on the wall, clearly visible from the public area.

If they don't produce both of these, you have the law on your side if you keep the VAT-amount until you see them... (This you didn't hear from me - you heard it from your uncle inlaw, who is a big guy in RD) ... (Rest assured, the phony restaurents fear the RD more than most other things, so they won't call the police).

No, I don't run any restaurent ... and I never go to Italian ones because I like the Thai-Western fusion spaghetti dishes the local Thai restaurents have on their menues, much better.

[Cyberstar]

It should be noted that the 7% vat should NOT cover the whole bill as not all the food is subject to VAT. No local food is subject to it and some imported food is also excempt.

On restaurents you're not "refunding" the VAT paid when the restaurent bought the ingredients. The VAT that is paid at each step of the "food-chain" is a tax that applies specifically to that particular step. The VAT, RD requires the place to collect from the next link in the chain (you), is 7% of the amounts you see on the bills (if the place is VAT-registered) ... Whatever VAT might have been paid at any other step is totally irrelevant. The VAT on the carrots is a matter between RD and the restaurent and a question of how much of his VAT expenses he can subtract from the VAT he - on behalf of RD - collected from you before submitting the remainder to RD... Nothing dodgy at all by 7% on the whole meal even if all ingredients were VAT-exempt.

[scottie dog]

It should be noted that the 7% vat should NOT cover the whole bill as not all the food is subject to VAT. No local food is subject to it and some imported food is also excempt.

On restaurents you're not "refunding" the VAT paid when the restaurent bought the ingredients. The VAT that is paid at each step of the "food-chain" is a tax that applies specifically to that particular step. The VAT, RD requires the place to collect from the next link in the chain (you), is 7% of the amounts you see on the bills (if the place is VAT-registered) ... Whatever VAT might have been paid at any other step is totally irrelevant. The VAT on the carrots is a matter between RD and the restaurent and a question of how much of his VAT expenses he can subtract from the VAT he - on behalf of RD - collected from you before submitting the remainder to RD... Nothing dodgy at all by 7% on the whole meal even if all ingredients were VAT-exempt.

If as you say you do not run a VAT establishment where did you get your information from? You cannot regain 100% VAT as in Europe only 75%. Please see my earlier reply regarding what is VAT'ed and what is not. It Is WRONG to charge VAT on the total Bill. You are also wrong regarding VAT receipts, they are on request, not obligatory. Any establishment which is charging 7% of the total bill is being a fraud no matter if they are VAT registered or not. Also your threshhold figures are wrong

[JimsKnight]

I don't know for a fact that this is true, but I have heard it from a number of sources.

The rumor is that practically all the better Italian Restaurants have gotten together and are going to start charging 10% for service and 7% for VAT (most of which will never be reported to the tax office) to increase their profit margins -and soon.

If they do this, you can be sure that every other restaurant in Chiang Mai will copy them and it will be a choice of paying it or learning to cook yourself.

I would really hate food prices to go up so drastically and I don't like to cook.

What to do?

I somehow doubt every other thai restaurant will copy them uly.

The thai restaurants most price aware expats eat in don't even have this 7% rip off charge.

[SwaziBird]

If anyone says "Plus Plus" I go elsewhere, Italian or not.

BRILEY FOR PRESIDENT !

[Ulysses G.]

JimsKnight Posted Today, 2007-01-01 16:22:17

I somehow doubt every other thai restaurant will copy them uly.

The thai restaurants most price aware expats eat in don't even have this 7% rip off charge.

I hope that you are right, but, a few months ago, we were talking to the owner of a restauraunt near Thapae Gate when someone mentioned that another popular place had started charging 7% VAT on every bill. When we went back a few days later, the second guy was doing it.

As far as eating only Thai food goes, I lived in San Francisco for many years and am used to trying all different cusines on a constant basis. I find it wonderful that we can do the same thing in Chiang Mai and for a reasonable price.

To be quite frank, eating only Thai food, after this many years of living here, sounds like torture!

[naka]

Boycott all Italian restaurants now as a preemptive strike.

Hit them before they hit us!

Other restaurants will, hopefully, see the damage done to the Italian restaurants and not copy this attempted rip off.

Wouldn't it be better to wait and see who tries it on, and only avoid these businesses?

Nah why wait? Avoid them all starting now its all over priced over hyped rubbish food anyway.

Stick to good old fashioned Thai food

Chicken, bone in

Fish, head on, guts in

Fatty pork, bone in

Too much salt

Too much sugar

Too much MSG

Smelly fish sauce

And those orrible little green cucumber thingies

And all this, sitting for hours at room temperature just fermenting away !

If anyone says "Plus Plus" I go elsewhere, Italian or not.

Now your talking

Naka.

[Cyberstar]

If as you say you do not run a VAT establishment where did you get your information from?

It doesn't serve your credibility well, that you can't even remember what you must have read less than a minute before commenting. I've only said: "I don't run any restaurent" .. One of my primery sources is my accountant - a good old lady with about 35 years experience in how the requirements of CM's RD are to be handled in practical life. Another primary source is the VAT-forms I sign and stamp every month and submit together with lists of received input VAT and paid output VAT.

You cannot regain 100% VAT as in Europe only 75%.

I don't know where you've got the 75% from ... All I know is that I can regain 100% of that part of my output VAT that is documented by proper tax-invoices from my suppliers and 0.00% of the part of my output VAT, that doesn't come with a proper tax-invoice ... (luckily, with few exception, those of my company expenses, that don't come with a tax-invoice is paid to suppliers that aren't in the VAT-system, meaning I haven't paid any output VAT to be regained anyway.

It Is WRONG to charge VAT on the total Bill.

Please tell that to RD ... They claim that I MUST collect 7% tax of my TOTAL turnover ... Your posts clearly demonstrate you don't understand even the basic principles of the VAT system - so I'll make things clear for you: My total turnover is the full amount I receive divided by 1.07 (or alternatively: my turnover plus 7% of that amount yields the amount my customers pay) ... Total turnover certainly isn't linked to whether or not some of my purchases were exempt from VAT - that issue would only enter the calculations as causes for having a smaller amount output VAT to subtract from the input VAT.

You are also wrong regarding VAT receipts, they are on request, not obligatory.

You're (probably) right on this one - I mixed it up with the requirement that the company must have a bunch of proper tax-invoices ready for customers.

Any establishment which is charging 7% of the total bill is being a fraud no matter if they are VAT registered or not.

Fraud only depends on whether the '7% of the total bill' is fully declared to RD.

Also your threshhold figures are wrong

I assume you're referring to the threshhold of 1.8 mil above which the business must register for VAT? ... It's the treshhold Greg from Sunbelt Asia has mentioned in various posts ont the Visa/Business forum, the newest (I have seen) was posted about a month ago ... Don't know if the threshold has been changed later.

It should also be remembered that most establishments pay a "fixed" (as determined by the local VAT Office) Vat fee which they determine by visiting establishments and "estimating" the turn-over!

What's your guess: will RD's determination be under or over the actual turnover? ... In the latter case the poor soul will have to pay RD 7% of money he hasn't made.

The 7% should be accounted for when costing the individual meal.

Please, also tell that to RD.

[scottie dog]

If as you say you do not run a VAT establishment where did you get your information from?

It doesn't serve your credibility well, that you can't even remember what you must have read less than a minute before commenting. I've only said: "I don't run any restaurent" .. One of my primery sources is my accountant - a good old lady with about 35 years experience in how the requirements of CM's RD are to be handled in practical life. Another primary source is the VAT-forms I sign and stamp every month and submit together with lists of received input VAT and paid output VAT.

You cannot regain 100% VAT as in Europe only 75%.

I don't know where you've got the 75% from ... All I know is that I can regain 100% of that part of my output VAT that is documented by proper tax-invoices from my suppliers and 0.00% of the part of my output VAT, that doesn't come with a proper tax-invoice ... (luckily, with few exception, those of my company expenses, that don't come with a tax-invoice is paid to suppliers that aren't in the VAT-system, meaning I haven't paid any output VAT to be regained anyway.

It Is WRONG to charge VAT on the total Bill.

Please tell that to RD ... They claim that I MUST collect 7% tax of my TOTAL turnover ... Your posts clearly demonstrate you don't understand even the basic principles of the VAT system - so I'll make things clear for you: My total turnover is the full amount I receive divided by 1.07 (or alternatively: my turnover plus 7% of that amount yields the amount my customers pay) ... Total turnover certainly isn't linked to whether or not some of my purchases were exempt from VAT - that issue would only enter the calculations as causes for having a smaller amount output VAT to subtract from the input VAT.

You are also wrong regarding VAT receipts, they are on request, not obligatory.

You're (probably) right on this one - I mixed it up with the requirement that the company must have a bunch of proper tax-invoices ready for customers.

Any establishment which is charging 7% of the total bill is being a fraud no matter if they are VAT registered or not.

Fraud only depends on whether the '7% of the total bill' is fully declared to RD.

Also your threshhold figures are wrong

I assume you're referring to the threshhold of 1.8 mil above which the business must register for VAT? ... It's the treshhold Greg from Sunbelt Asia has mentioned in various posts ont the Visa/Business forum, the newest (I have seen) was posted about a month ago ... Don't know if the threshold has been changed later.

It should also be remembered that most establishments pay a "fixed" (as determined by the local VAT Office) Vat fee which they determine by visiting establishments and "estimating" the turn-over!

What's your guess: will RD's determination be under or over the actual turnover? ... In the latter case the poor soul will have to pay RD 7% of money he hasn't made.

The 7% should be accounted for when costing the individual meal.

Please, also tell that to RD.

Suggest you get a better accountant/lawyer combination. You are being miss advised

[Cyberstar]

If as you say you do not run a VAT establishment where did you get your information from?

It doesn't serve your credibility well, that you can't even remember what you must have read less than a minute before commenting. I've only said: "I don't run any restaurent" .. One of my primery sources is my accountant - a good old lady with about 35 years experience in how the requirements of CM's RD are to be handled in practical life. Another primary source is the VAT-forms I sign and stamp every month and submit together with lists of received input VAT and paid output VAT.

You cannot regain 100% VAT as in Europe only 75%.

I don't know where you've got the 75% from ... All I know is that I can regain 100% of that part of my output VAT that is documented by proper tax-invoices from my suppliers and 0.00% of the part of my output VAT, that doesn't come with a proper tax-invoice ... (luckily, with few exception, those of my company expenses, that don't come with a tax-invoice is paid to suppliers that aren't in the VAT-system, meaning I haven't paid any output VAT to be regained anyway.

It Is WRONG to charge VAT on the total Bill.

Please tell that to RD ... They claim that I MUST collect 7% tax of my TOTAL turnover ... Your posts clearly demonstrate you don't understand even the basic principles of the VAT system - so I'll make things clear for you: My total turnover is the full amount I receive divided by 1.07 (or alternatively: my turnover plus 7% of that amount yields the amount my customers pay) ... Total turnover certainly isn't linked to whether or not some of my purchases were exempt from VAT - that issue would only enter the calculations as causes for having a smaller amount output VAT to subtract from the input VAT.

You are also wrong regarding VAT receipts, they are on request, not obligatory.

You're (probably) right on this one - I mixed it up with the requirement that the company must have a bunch of proper tax-invoices ready for customers.

Any establishment which is charging 7% of the total bill is being a fraud no matter if they are VAT registered or not.

Fraud only depends on whether the '7% of the total bill' is fully declared to RD.

Also your threshhold figures are wrong

I assume you're referring to the threshhold of 1.8 mil above which the business must register for VAT? ... It's the treshhold Greg from Sunbelt Asia has mentioned in various posts ont the Visa/Business forum, the newest (I have seen) was posted about a month ago ... Don't know if the threshold has been changed later.

It should also be remembered that most establishments pay a "fixed" (as determined by the local VAT Office) Vat fee which they determine by visiting establishments and "estimating" the turn-over!

What's your guess: will RD's determination be under or over the actual turnover? ... In the latter case the poor soul will have to pay RD 7% of money he hasn't made.

The 7% should be accounted for when costing the individual meal.

Please, also tell that to RD.

Suggest you get a better accountant/lawyer combination. You are being miss advised

Who do you think you're fooling?

[SBACM]

Cyberstar, That was the best Explanation of Vat that I have ever read.

Your very well Informed I wonder if your Accountant is the Same as mine?

Khun Supan?

[SabahCafeandCinima]

Price increases for restaurant food are well over due

Good on them

[ThaiPauly]

Price increases for restaurant food are well over due

Good on them

Have to agree ..every restaurant in town should hike its prices by 100%

if you can't think of anything sensible to say....say nothing