Table of Contents
Get to know Value Added Tax or Vat 7% What is it?
What are the principles for collecting VAT on goods and services?
Should business owners register for VAT? Who should register for VAT?
Who is exempt from VAT registration under the law?
Where can I register for VAT?
Advantages of VAT Registration
Disadvantages of VAT Registration
summarize
Get to know Value Added Tax or Vat 7% What is it?
When talking about Value Added Tax, many people are confused about which tax it is and how to collect it. However, if you say VAT (Value Added Tax), it will sound familiar. Value Added Tax is a tax that is collected from the increase in value of goods or services at every stage of production and distribution. Business operators must collect this tax from buyers at each stage and remit it to the government. Thailand has a value added tax of 7% of the price of goods and services. It is not only Thailand that has a value added tax, but it is widely used in many countries, such as Japan, which has a value added tax of up to 10%.
What are the principles for collecting VAT on goods and services?
Of course, not everyone can charge VAT on their own goods or services. In principle, VAT is levied on goods and services. VAT is levied on buyers of goods and services at every stage of the production and distribution process. Registered operators add VAT to the price of the goods or services sold.
Generally, withholding tax, entrepreneurs are entitled to deduct the VAT paid at the stage of purchasing raw materials or services from the tax collected from customers at the stage of selling. The difference between the output tax and the input tax must be remitted to the government, where entrepreneurs must submit a VAT report and pay taxes to the Revenue Department within the specified time frame.
Should business owners register for VAT? Who should register for VAT?
Generally, VAT registration or VAT registration is available for all business operators. Even if your business is not a company, you can register. However, there are usually 3 cases of business operators who should register for VAT:
Entrepreneurs who earn more than 1.8 million baht per year office 365 database from selling goods or providing services are required to register for VAT. If they know that their income has reached the specified criteria, they must register for VAT within 30 days from the date that their income reaches the specified criteria.
Entrepreneurs who earn income from international trade. For those who do business in trading and exchanging goods from abroad, they must register for VAT.
New entrepreneurs who expect to earn more than 1.8 million baht per year can register for VAT without having to wait until they earn more than 1.8 million baht per year.
Who is exempt from VAT registration under the law?
However, some operators are not required to register for VAT, but must comply with the exception law, which has a system that requires them to be the following operators or organizations:
Small business operators with income less than 1.8 million baht per year are not required to register for VAT.
Entrepreneurs who sell goods or provide services that are exempt from VAT, such as selling fresh food, medicine, medical services, educational services, passenger transportation services, and agricultural services, etc.
An organization or entity that is exempt, whether it is a non-profit organization or a charitable organization, is exempt from paying VAT by law.
Where can I register for VAT?
Currently, registering for VAT is very easy because the Revenue Department allows entrepreneurs with an income of more than 1.8 million baht per year to submit tax documents via online channels such as www.rd.go.th or at the local Revenue Office. The documents must be prepared. You can check which documents you should prepare on the website we recommend. There will be detailed information. If you have any further questions about registering for tax, you can call 1161.
Advantages of VAT Registration
Increase credibility by demonstrating the officiality of your business opening, making customers and business partners feel confident in doing business with you.
Large companies and organizations tend to look primarily at VAT registered partners, giving them the opportunity to trade with many large businesses.
Right to tax deduction Entrepreneurs can claim back the VAT paid at the stage of purchasing raw materials or services, which helps reduce the tax burden to be paid to the government. In addition, tax deduction helps reduce production costs and increase net profits.
Compliance with the law allows businesses to operate legally and avoid fines or license cancellation, reducing the risk of audits by the Revenue Department.
Enhance corporate image VAT registration helps to enhance the positive image of the organization in the eyes of customers and the public, promoting transparency and professionalism of the business.
Disadvantages of VAT Registration
Administrative burden: Businesses will be burdened with managing and filing complex tax reports.
Impact on low-income earners: Value-added tax is a tax that is levied on sales value, so low-income earners may be more affected than high-income earners.
