When an employee of a Thai company incurred expenses for an overseas business trip which can be refunded from the organizers abroad, the Thai company can payback its employee for the expenses incurred and reimbursed it from such overseas based company through the following:
- All official receipts must be issued to the Thai company. Those receipts will be treated as expenses of the company so that when it issues an invoice to the overseas based company, such amount will be treated as income of the Thai company, which 7% VAT has to be added in the invoice; OR
- All receipts (amount of expenses and VAT) will be recorded as Account Receivable from overseas based company so that when it issued an invoice to the overseas based company, it should use the wording “reimbursement at cost”. In this way, all the receipts that the company cannot claim back the 7% VAT will also be reimbursed. There is no need to add 7% VAT in the invoice because the company is reimbursing the whole amount plus VAT that appears on the receipts.
If you are looking for English speaking accountants that can handle your accounting and tax filing in Thailand, contact MSNA now.