Value Add Tax Or VAT Setup in Thailand

Who needs to set up VAT?

• Businesses over 1.8 million baht: any business that regularly sells goods or services in Thailand, unless the activity is exempt, must join the VAT system once its income passes 1.8 million baht a year.
• New businesses that expect higher income: you can apply before you start trading.
• Smaller businesses by choice: a business under 1.8 million baht can choose to join the VAT system, for example because its customers want tax invoices.
• Foreign companies hiring foreign staff: VAT status is often expected when applying for work permits.
• Foreign digital service providers: overseas companies selling digital services to consumers in Thailand must also apply once their Thai income passes 1.8 million baht.

Key VAT facts

What changes once you have a VAT number

• Charge 7% VAT on your taxable sales of goods and services.
• Issue full tax invoices with the details the Revenue Department requires, including your tax ID and branch number.
• Claim input VAT on business purchases backed by valid tax invoices.
• File every month: a P.P.30 return is needed every month, even if there were no sales.
• Keep VAT reports: monthly reports of sales tax, purchase tax and stock (for goods businesses) must be kept up to date.

How the setup works

1. Review your business: we check your income, your activities and whether any of them are VAT exempt.
2. Check your office: the Revenue Department needs a proper place of business, so we confirm your office meets its requirements.
3. Prepare the application: we prepare Form P.P.01 and all supporting documents.
4. File with the Revenue Department: we file the application at the Area Revenue Office for your office location and follow up, including any office visit by officials.
5. Receive your VAT certificate: you get your P.P.20 certificate and can start issuing tax invoices.
6. Monthly filing (optional): VEACCO can prepare and file your P.P.30 returns every month.

Documents we need from you

• Company affidavit and Memorandum of Association
• Copies of the directors’ ID cards or passports
• Lease agreement for the office, or a letter of consent to use the premises
• Copy of the property owner’s ID card and house book (Tabien Baan), or company documents if the owner is a company
• Map of the office location
• Photos of the office, inside and outside, with the company sign clearly visible
• Power of attorney, if VEACCO files on your behalf

Frequently asked questions

When do we need to apply for VAT? Within 30 days of your income passing 1.8 million baht a year. You can also apply before you start trading.

Can we join the VAT system below 1.8 million baht? Yes. Smaller businesses can choose to join, which is useful when customers ask for tax invoices.

What is the VAT rate in Thailand? 7%, which has been extended until 30 September 2027. The legal rate is 10%, but it is reduced each year by royal decree.

Do we have to file a VAT return if we had no sales? Yes. A P.P.30 return must be filed every month, even when there is nothing to pay.

What happens if we file late? The Revenue Department charges a fine of 300 baht if the return is filed within 7 days of the deadline, and 500 baht after that, plus a monthly surcharge on any unpaid tax.

Can we use a virtual office? It depends. The Revenue Department needs a real place of business and may visit it, so we check your office before you apply.