VATLive > Blog > VAT > Thailand to cut VAT rate to 6.3% in 2014 with rise to 9% in 2015 - Avalara

Thailand to cut VAT rate to 6.3% in 2014 with rise to 9% in 2015

  • VAT
  • 17 July 2014 | Richard Asquith

Thailand to cut VAT rate to 6.3% in 2014 with rise to 9% in 2015

The Thai government has announced a proposal to temporaily reduce the Value Added Tax rate from 7% to 6.3%.  If approved, the Thailand VAT cut would be introduced between 1 October 2014 and 30 September 2015.

There will be a new, local sales tax rate of 0.7% to be added, meaning the effective rate will remain at 7%.

There would then be a permanent rise to 9% from 1 October 2015.  There will also be a 1% charge of local sales tax, taking the combined rate to 10%

The current 7% rate was always intended as a temporary measure.  There have been numerous discussions to increase it back to 10%.  One of the reasons for the delay has been that the government had wished to remain competitive to Singapore, which has a 7% Goods & Services Tax rate.

This proposal is unexpected as the new military government had initially promised a freeze on the consumption tax.


VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which this year won International Tax Review's Tax Technology Firm of the Year. Richard qualified as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.