LEADING THE WAY
Service providers are normally entitled to charge VAT at a zero rate on services performed in Thailand and used by customers outside Thailand. In the past, the services had to be used entirely overseas, according to the original version of Clause 2 (1) of the Revenue Department director-general's notification on VAT No.105. This is not necessarily the case any more.
Under the revised version of the same clause, which became effective on April 29, 2011, if the services performed in Thailand are used both in Thailand and abroad, the portion of the services used abroad would be exempt from VAT while the portion used in Thailand would be subject to 7% VAT.
Nevertheless, if the evidence to support the portion of the services that was used abroad cannot be made available during a tax audit, the Revenue Department might impose 7% VAT on all the services used, both in Thailand and abroad.
This article is older than 60 days, which we reserve for our premium members only.You can subscribe to our premium member subscription, here.