Determine who supplies what
Start with the legal supplier, customer, contractual service and where it is performed and used. Do not decide VAT from the currency, bank account or wording placed on the invoice alone.
Where a UK and Thai company both contribute, document the intercompany service and the customer-facing supply separately. The accounting should match the contracts and operational facts.
Thai VAT registration
The Thai Revenue Department states that a person or entity regularly supplying goods or services in Thailand can become subject to VAT once the applicable annual turnover threshold is exceeded.
Some activities are exempt and imported services can have separate treatment.
The published English guidance currently describes a 1.8 million baht threshold and a general 7% rate, but the page and temporary-rate measures must be checked for the period concerned.
Registration can also affect invoices, monthly returns and input-tax evidence.
Withholding tax
Thai customers can be required to withhold tax from specified payments and issue evidence to the supplier. The rate depends on the payment, recipient and treaty position rather than a single standard percentage.
A deduction from the invoice does not necessarily represent a commercial short payment. Record gross revenue, withholding tax and cash received, then preserve the certificate for the corporate or personal tax return.
Tax invoices and records
A VAT tax invoice requires prescribed information. Ordinary commercial invoices, receipts and VAT tax invoices are not always interchangeable.
Use sequential documents, correct legal names, tax identifiers and descriptions. Reconcile issued invoices to contracts, bank receipts, withholding certificates and monthly returns.
- Supplier and customer legal names
- Thai tax identification details where required
- Invoice and tax-invoice number
- Supply date and description
- Value before VAT and VAT amount
- Withholding certificate
- Foreign-currency and exchange-rate record
Cross-border services
Services performed in Thailand for overseas customers and services supplied from abroad for use in Thailand can raise different VAT questions. Zero-rating is conditional and should not be assumed merely because the customer is foreign.
Review permanent establishment, Foreign Business Act and work-authorisation issues alongside indirect tax. Correct VAT treatment does not by itself make the underlying activity legally permitted.
Frequently asked questions
Does a foreign customer mean a Thai service is automatically zero-rated?
No. The conditions for exported services include how and where the service is performed and used.
Confirm the current Thai VAT rules for the exact supply.
Why did a Thai customer pay less than my invoice?
The customer may have been required to withhold tax. Obtain the withholding certificate and record gross revenue, tax withheld and net cash separately.
Does a UK invoice avoid Thai VAT?
Not automatically. The supplier, place of performance, use of the service, Thai presence and registration rules matter more than the invoice template or currency.