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Thailand may face VAT rate increase

  • Apr 30, 2014 | Richard Asquith

Thailand may face VAT rate increase

Thailand may be forced to raise its Value Added Tax rate from 7% to 10% as the region slows due to political unrest.

Thailand has held its VAT rate down to 7% as a temporary measure for some years. It has wanted to match the Singapore GST rate of 7%. However, the government ordnance prolong the reduced rate has now expired.

Whilst a 3% rise to 10% would in principle raise the required amount to fill next year’s projected deficit, there is a big problem with tax avoidance and the black market which might be exasperated with a higher rate. But the government is under pressure from the international credit agencies to act.

Non-residents subject to higher Thai VAT

Non-resident companies providing taxable supplies in Thailand should general register and charge local VAT, so will be subject to any increase.

Foreign companies that carry out a business in Thailand are taxable persons for VAT purposes, although temporary registration are possible for short-term or one-off transactions. Foreign companies importing into or providing taxable supplies in the Free Trade Zones will remain exempt.

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 can be contacted at: He is part of the European leadership team which won International Tax Review's 2019 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.