Recently, we registered a company engaged in export business. They asked us how they can claim back the VAT that they will pay. This is our answer.

Once the company is registered in the VAT system and you buy anything, please always remember to ask the vendors to issue a Tax Invoice in the company name with the correct address. 

At month end, your accountant will gather all the tax invoices issued by your vendors and make an input VAT report and the accountant will also gather all your tax invoices that you issued to make an output VAT report. Then the difference of the VAT amounts (the input VAT in excess of the output VAT) will be claimed back from the Revenue Department through these methods:

1. You roll forward the excess VAT amount to the following months until you have a big enough amount then you click to claim the big amount at once.

2. You click to claim back the excess VAT amount every month.

Note that the Revenue Department will ask for so many documents to make sure that all the VAT you claim back is legitimate, so we suggest not to claim back every month. Some companies do it every quarter of every half year. You can engage MSNA group to do your accounting and tax filing. We can also meet with the Revenue Department on your behalf, if necessary. However, we cannot help to speed up the VAT refund process.

When a foreigner who is a tax resident of Thailand pays tax on his income abroad, the amount of paid tax can be credited against the tax payable in Thailand. This is applicable only if the country has a Double Tax Agreement (DTA) with Thailand. In this case, there will be no double taxation for tax residents of Thailand.

The amount of tax that can be credited should not be higher than the amount of Thailand’s tax liable to the foreign-sourced income.

To use this foreign tax relief, the Revenue Department may require documents and evidence to prove sources of income and to claim foreign tax credit under DTA. Such documents must be in English or Thai. For the supporting documents to claim foreign tax credit, Tax Payment Certificate issued by the foreign tax authority is recommended.

Contact MSNA for personal income tax computation, filing of tax returns and getting Income Tax Payment Certificate or Tax Residence Certificate in Thailand.

One of our accounting and payroll clients asked us about their employee claims.

Question:

We understand that the staff claims without original copy or receipts/tax invoices will be deemed non-deductible expenses when we submit yearly tax. Can you explain more on this so we can implement necessary steps?

Answer:

Normally, a company can claim expenses that have original receipts and tax invoices issued in the company name. And if the nature of the expense is one that has no receipt, like taxi fares, then the claim should be accompanied with a little explanation of the expense, like from where to where and for what business.

For expenses without original receipts/tax invoices, like when your employees buy things but did not ask the vendors for them, you have to book the expenses as non-tax deductible. Thus, please remind them to request for an official receipt/tax invoice every time. For example, when they buy things from a supermarket, they need to tell the supermarket to issue a receipt in the company name. For the case of buying things or ordering food through online applications (e.g. from Grab, Lineman or Foodpanda), you may use the e-receipts which are in the company name to be the accounting transaction supporting documents. However, because it is for food, if you pay for food for your employees, you need to add the amount to their monthly income to calculate personal income tax too. But if it is to entertain clients, then you may book it as an entertainment expense.

For air tickets and hotel stay for business purposes, you have to remind them also to request receipt/tax invoice in the company name otherwise, it will be recorded as non-tax deductible expenses.

If you need payroll, accounting or tax services, contact MSNA for assistance. We are the official accountant of the American Chamber of Commerce in Thailand and has been serving the international business community for over 25 years now.