Value-added tax (VAT) plays an important role in the economic system of many countries, including Thailand. VAT is an indirect tax that generates government revenue, and, in Thailand, that revenue is allocated toward various projects and missions that support national development. VAT is collected on purchases of goods and services within the country, as well as goods that are imported from abroad. Understanding VAT is beneficial for businesses and customers alike.

In this article, we’ll explain more about how VAT works in Thailand, including rates, the filing process, and how to calculate it.

What’s in this article?

• What is value-added tax (VAT)?
  
• How VAT works in Thailand
  
• The VAT filing process in Thailand
  
• How to calculate VAT
  
• How to file VAT
  
• How Stripe Tax can help
  

What is value-added tax (VAT)?

VAT is an indirect tax levied on the production and distribution of goods and services within the country, as well as on imports from abroad. This tax is included in the price that customers pay. Business owners who are registered for VAT are responsible for collecting it from customers and sending it to the Revenue Department on the appropriate date. In general, the VAT system is considered transparent and easily traceable. According to data from May 2025, VAT systems are in place in 175 countries worldwide, with some countries in the Asia Pacific region referring to the tax as a goods and services tax (GST)—though the two are technically different forms of indirect taxes.

How VAT works in Thailand

Thailand introduced VAT in 1992. Initially, the VAT rate was set at 10%, but the following year, it was reduced to 7%. Due to economic factors, laws have been continuously passed to extend the enforcement of the 7% VAT rate—through the present—to help stimulate domestic consumption.

Businesses in Thailand with annual revenue exceeding 1.8 million baht are required to file a VAT return, with approximately 11% of the VAT revenue being transferred to local governments and the remaining 89% going to the central government.

There are two main VAT rates in Thailand:

• VAT rate of 10%: This is the first and main rate established by Thai law according to the Revenue Code Amendment Act No. 30 B.E. 2534 (AD 1991). However, while the law states that the effective rate is 10%, it has never been raised to this level in practice.
  
• VAT rate of 7%: This rate has been in effect since 1992, when the government announced a reduction from 10%, and the government has continuously extended the period of this rate’s use to maintain economic stability. The latest continuance is Royal Decree No. 799 B.E. 2568 (AD 2025), which extended the use of the 7% VAT rate until September 30, 2026.
  

In addition to the 7% and 10% VAT rates, there are certain goods and services that are classified as special transactions, and these come with either a 0% rate or a VAT exemption.

• VAT rate of 0%: Section 80/1 of Thailand’s Revenue Code allows certain types of businesses to use a VAT rate of 0%. This is not a tax exemption; businesses still have to register for VAT, however, they are entitled to issue 0% VAT invoices and can request a refund of any purchase tax, also known as input tax. Examples of activities that qualify for a 0% VAT rate include selling and exporting goods from Thailand to foreign countries, selling goods in duty-free zones, or providing certain services (e.g., international transportation, consulting, or specialist services) in Thailand that are applied abroad.
  
• VAT exemption: Section 81 of the Revenue Code allows certain types of goods or services to be exempt from VAT collection, but that also means that the businesses providing them are not entitled to issue tax invoices in the VAT system and cannot request a refund of input tax. Examples of activities that qualify for VAT exemption include medical and public health services, public and private educational institutions, domestic passenger transport services, religious and charitable services, sports, cultural and artistic services, and basic agriculture.
  

The VAT filing process in Thailand

Filing VAT is necessary for Thai businesses with revenue that exceeds a certain threshold dictated by the government (currently 1.8 million baht) or that have voluntarily entered the VAT system. These businesses are required to file by the appropriate deadlines and according to the correct procedure. Here’s what that procedure entails.

Verifying VAT registration criteria

Businesses with revenue that exceeds 1.8 million baht per year (according to the accounting period) must register for VAT within 30 days of the date that the revenue exceeded the threshold. Even if revenue doesn’t exceed 1.8 million baht, a business can register for VAT if it thinks it will be beneficial. For example, the business might want to receive input tax credits, create a better public image (since many companies only do business with partners who can issue VAT invoices), or prepare to expand.

Preparing documents for VAT registration

* Nonjuristic person group: a general partnership, nonjuristic foundation fund, private agency, or business operated by two or more nonjuristic persons.

The documents required for VAT registration are as follows:

• A registration application using Form Por.Por.01 (3 copies).
  
  • If an exemption has been granted or the business is voluntarily registering with the VAT system, also use Form Por.Por.01.1 (3 copies).
    
• A copy of the house registration or documents related to the business, such as a rental contract or sales contract, along with a map and photographs that clearly show the house number or business number.
  
• If authorizing another person to act on your behalf, a power of attorney must be affixed with a 10 baht stamp and a copy of the ID card of the grantor and the authorized representative. Note that the authorized representative must be 20 years of age or older.
  
• Foreign VAT registrants are required to attach a photo of their passport or a document used in lieu of a passport, or a photo of their alien identification card.
  

Registering for VAT

• Register at the revenue office:
  
  • For Bangkok: Submit Form Por.Por.01 to register for VAT at the revenue office in the district area.
    
  • For other provinces: Submit Form Por.Por.01 to register for VAT at the local revenue office.
    
• Once you have submitted your VAT registration application, you will receive a 13-digit tax identification number.
  

Preparing and issuing VAT documents

The documents required for VAT registration are as follows:

• Tax Invoice: Businesses registered for VAT are required to issue tax invoices in the correct format as specified by the Revenue Department when selling goods or providing services. Important items to include on a VAT invoice are:

  • “Tax invoice” in the subject line
    
  • Name, address, and tax identification number of the business operator issuing the tax invoice
    
  • Name, address, and tax identification number of the purchaser of the goods or the service recipient
    
  • Tax invoice number
    
  • Details of the goods or services sold
    
  • Total amount of VAT applied to the goods or services sold
    
  • Date, month, and year the invoice was issued
    

• Record of the purchase tax and sales tax: The entries of input tax and output tax should be recorded so that you can file your monthly VAT reports.

• Debt increase or debt reduction note: If there is a change in your inventory or a return is made, it is necessary to issue either a credit note or a tax invoice to adjust the sales tax and purchase tax correctly.

How to calculate VAT

To calculate VAT—which you will file using Form Por.Por.30—you’ll need to follow a specific formula. This formula consists of three variables: VAT, sales tax (i.e., output tax), and purchase tax (i.e., input tax).

VAT

VAT can be calculated by deducting the total monthly purchase tax from the total monthly sales tax. If the sales tax is greater than the purchase tax, the difference is the amount of tax that the business must pay. If the purchase tax is greater than the sales tax, the difference can be refunded in cash or carried forward as a tax credit for the following month.

VAT formula

To calculate VAT—which you will file using Form Por.Por.30—you’ll need to follow a specific formula. This formula consists of three variables: VAT, sales tax (i.e., output tax), and purchase tax (i.e., input tax).

The formula for VAT is:

VAT = Sales Tax − Purchase Tax

To know whether your business owes or is owed a refund, remember the following:

• If the sales tax is greater than the purchase tax, the business owes VAT.
  
• If the sales tax is less than the purchase tax, the business is eligible for a VAT refund or tax credit.
  

Sales tax

VAT-registered businesses collect sales tax from customers when selling goods or providing services.

Sales tax formula

The sales tax can be calculated as follows:

Sales Tax = Taxable Sales Amount x Tax Rate

Example: Assume a business has taxable sales of 100,000 baht. Multiply 100,000 by a tax rate of 7% (i.e., 0.07). The sales tax would come out to 7,000 baht.

Purchase tax

This is the tax that a VAT-registered business pays when purchasing goods or paying for services for use in its own business. Note that the purchase tax that can be deducted from the output tax includes the purchase of capital goods as well.

Purchase tax formula

The purchase tax can be calculated as follows:

Purchase Tax = Total Purchase Amount x Tax Rate

Example: If the purchase amount (i.e., the total amount of goods or services that can be claimed as a tax credit) is 50,000 baht, the business would multiply that by the 7% tax rate. The purchase tax would then equal 3,500 baht.

How to file VAT

To file VAT, you will submit Form Por.Por.30. These are the additional documents and pieces of information you’ll need to include:

• A sales tax report (i.e., a summary of all sales and the sales tax applied for the month).
  
• A purchase tax report (i.e., a summary of all purchases and the purchase tax paid for the month).
  
• In the case that the purchase tax is more than the sales tax, it is possible to apply for a tax refund. You can do this with Form Por.Por.30, simply by attaching the necessary evidence. Once an inspection is complete, you will receive the funds or a credit within 3–6 months.
  
• A withholding tax certificate (if any).
  
• Purchase and sales tax invoices, and credit or debit notes to verify the correctness of the tax amount.
  

Forms should be filed according to type by the proper due dates to avoid late filing or payment penalties. They are as follows:

Note: All tax documents and related information should be retained for future inspection. Paper documents should be retained for at least 5 years and electronic documents for at least 10 years.

How Stripe Tax can help

Stripe Tax reduces the complexity of tax compliance so you can focus on growing your business. Stripe Tax helps you monitor your obligations and alerts you when you exceed a sales tax registration threshold based on your Stripe transactions. In addition it automatically calculates and collects sales tax, VAT, and GST on both physical and digital goods and services—in all US states and in more than 100 countries.

Start collecting taxes globally by adding a single line of code to your existing integration, clicking a button in the Dashboard, or using our powerful application programming interface (API).

Stripe Tax can help you:

• Understand where to register and collect taxes: See where you need to collect taxes based on your Stripe transactions. After you register, switch on tax collection in a new state or country in seconds. You can start collecting taxes by adding one line of code to your existing Stripe integration or add tax collection with the click of a button in the Stripe Dashboard.
  
• Register to pay tax: Let Stripe manage your global tax registrations and benefit from a simplified process that prefills application details—saving you time and simplifying compliance with local regulations.
  
• Automatically collect tax: Stripe Tax calculates and collects the right amount of tax owed, no matter what or where you sell. It supports hundreds of products and services and is up-to-date on tax rules and rate changes.
  
• Simplify filing: Stripe Tax seamlessly integrates with filing partners, so your global filings are accurate and timely. Let our partners manage your filings so you can focus on growing your business.
  

Learn more about Stripe Tax, or get started today.