On August 25th, 2020, the cabinet passed a draft bill to extend the current reduced rate of 7% VAT for another year. The statutory standard rate of VAT is 10%, but successive Royal Decrees have reduced the rate to 7%. Once the draft bill is enacted, the reduced rate will take effect from October 1st, 2020 until September 30, 2021, unless further extended by the government.
VAT is levied on the sale and provision of goods and services in Thailand, and the import of goods and services into Thailand. The export of goods and services rendered in Thailand but wholly consumed overseas is VAT exempt, as are select goods and services within Thailand, including the sale or lease of immovable property, medical services, educational services, interest, and health care services. Businesses with an annual turnover less than THB 1.8 million are also exempt from VAT, although it is recommended that businesses are VAT-registered regardless. To register for VAT, businesses must submit the form Phor.Por.01 to the Revenue Department before commencing operations, or within thirty days of exceeding the THB 1.8 million annual income limit.