We have previously sold our products in USD to a Thai customer. Now that we have incorporated our Thai company, is there any legal restriction on the local customers to continue paying us in USD because we need to pay USD overseas to import the products. Our Thai company hopes to avoid USD exchange rate risk. If it is in USD, how do we convert the exchange rate to calculate the withholding tax amount in Thai Baht?
Please make sure you let the customers know that the price and payment will only be in USD even though they will pay you in THB (using the exchange rate on the day they pay the USD amount owed).
The invoice and tax invoice to issue will show the amount in USD in parenthesis only, the THB amount has to be shown on the tax invoice using the rate of the day before. When the customer pays, they will pay in THB (using the USD amount appeared on the tax invoice with the rate of the day). The difference in the Baht amounts on the day they pay and on the tax invoice will be gain/loss from exchange rate.
There is no withholding tax involved when it is sale of goods. Only when it is service fee will there be withholding tax.
Contact MSNA for your Thai accounting and tax questions.