As a registered business in Thailand, it is important to be aware that whenever you purchase a services from a overseas service provider, you SHOULD consider 2 additional cost to your purchases.
- Withholding Tax of 5%
- 7% VAT
VAT- PP36
According to the law, you should 7% VAT on their behalf by the 7th of the following month using VAT return form PP 36 or by the 15 if submitted online. When you submit it, you will get a tax receipt from the Revenue Department. The VAT amount in the receipt is considered a purchase VAT or input VAT in the month that you submit it. You will claim it back in the same manner as all other purchase VAT you pay to Thai vendors.
The logic behind the need to submit 7% VAT on behalf of the overseas vendors is that all the vendors in Thailand charge you VAT and if you can buy goods or services from overseas and you don’t have to pay VAT, then no one will want to buy from the Thai vendors.
To protect the Thai vendors, the gov’t impose this law to make you pay VAT on behalf of the overseas supplier
WHT – PND54
When a Thai registered business purchase a service from a overseas business, you are required by law to pay 5% Withholding tax on the purchase price. The due date to submit your Withholding Tax return (PND 54) is on the 7th of every month and failure to submit on time will result a penalty by the Revenue Department.
If you have any Thai taxation questions, please feel free to contact UnionSPACE Accounting and Tax Team for advise.
Find out more about us at: www.unionspace.co.th or Line us: https://lin.ee/QUvqnS
