A VAT refund is an important entitlement that businesses and individuals should not overlook, but even a small mistake in the process can cost you the benefit you are entitled to.
Today we explain the key points and details you should check before applying for a VAT refund, so that you can be confident of receiving your full entitlement.
What Is VAT? Many People May Not Understand It
Value added tax (VAT) is a tax the government collects on the sale of goods or services at each stage of production until they reach the consumer. Thailand currently sets the VAT rate at 7%.
VAT-registered businesses must file VAT returns and can claim a refund if their input tax exceeds their output tax.
Examples of Services Subject to VAT
Many types of services are subject to VAT, for example:
Telecommunications services (telephone, internet)
Transport services (logistics)
Legal and accounting consultancy services
Hotel and accommodation services
Advertising and marketing services
Medical services (certain types only)
Cleaning and security services
Key Conditions for Claiming a VAT Refund
Before applying for a VAT refund, the business must make sure it fully meets the following conditions:
Correctly registered for VAT Only businesses already registered for VAT with the Revenue Department can claim a refund.
Input tax exceeds output tax The key condition is that input tax (tax paid on purchases of goods or services) must exceed output tax (tax collected on sales of goods or services) before a VAT refund can be claimed.
Documents prepared correctly and completely All documents must be filed and clearly verifiable, especially tax invoices, which must contain complete and correct details.
Documents Required for a VAT Refund
Claiming a refund requires clear and complete documents, as follows:
VAT refund application form (Form P.P.30, monthly VAT return)
Complete and correct purchase tax invoices
Proof of payment (receipts, transfer slips)
Copy of the VAT registration certificate
Power of attorney (if the applicant is not acting in person)
Any other supporting documents the Revenue Department requires
Steps to Claim a VAT Refund
Once the documents are ready, you can claim a VAT refund as follows:
Submit the application online You can submit the application immediately through the Revenue Department's e-Filing system, attaching all of the required documents.
Wait for the Revenue Department's review and approval The Revenue Department will review the documents and information you submitted. This generally takes around 30-60 days.
Receive the refund If approved, the refund is transferred to the business's bank account as specified in the application.
Points to Watch When Claiming a VAT Refund
If the refund process is handled carelessly or incorrectly, you can easily lose your entitlement or run into problems, so pay close attention to the following points:
Incomplete documents or incorrect information Missing key documents, such as incomplete tax invoices, or errors on the documents, such as mismatched dates, incorrect amounts, or a wrong business name or address, will delay the refund or lead the Revenue Department to reject it.
Claiming more than you are entitled to If you claim an inflated refund without clear supporting evidence, for example using fake tax invoices or back-dated tax invoices with no real purchase, and the Revenue Department discovers it, you may face both civil and criminal proceedings, with a fine of up to 2 times the tax wrongfully claimed or imprisonment of up to 7 years.
Missing the claim deadline Businesses should file VAT refund claims within the period set by law, which is normally no more than 3 years from the date the tax was paid. Filing late, or after that period, may forfeit the VAT refund you are entitled to.
Bookkeeping errors Incorrect or unsystematic bookkeeping may leave you unable to confirm the correct amount of input tax, causing problems during the Revenue Department's review. Always keep your accounting system accurate and correct.
Using an unreliable agent If you do not handle the claim yourself but use an agent, check their reliability, experience and track record. If the agent makes a mistake, you, as the refund applicant, are directly responsible.
Following the guidance above will reduce the risks in claiming a VAT refund and help you make full use of this entitlement.
