Thailand extends 7% VAT rate for another year

Thailand extends 7% VAT rate for another year

Company registration in Thailand could be a profitable move for those looking to expand their business or invest in the dynamic Asian market. If you are interested in starting a business in this country, then you should know that the Cabinet of Ministers on September 17, 2024 decided to extension of the current preferential rate of 7% VAT in Thailand until September 30, 2025

The customary VAT tariff in Thailand commenced at 10%, but subsequently, it was diminished to 7% (for a brief duration). This was executed as a component of the extraordinary fiscal stratagems. When a diminished tariff was unveiled, it was to curtail expenditure to the clientele, to imbue confidence in venture proprietors, and accelerate the tempo of expansion in the financial system of the Nation.

Thailand extended the 7% VAT rate for another year: ToWhat are the conditions under which VAT applies?

In accordance with Thai law, value added tax is applied to the sale of goods and services and to import transactions. Non-resident companies providing digital services to customers in Thailand are also subject to VAT at a rate of 7%. Effective September 1, 2021, Thailand became the latest Southeast Asian country to include VAT on digital services in its legislation.

Exported goods and services that are entirely consumed abroad are exempt from VAT in Thailand. This exemption applies to certain goods and services, including the rental and sale of real estate, medical and educational services, health services, basic food products and interest payments.

• Stimulating consumption. Maintaining a low VAT rate should support consumer spending, which in turn could support economic growth and recovery from economic crises.
• Business support. A low tax rate helps small and medium-sized enterprises “stay afloat” by reducing their tax burden and allowing them to effectively manage finances in conditions of economic uncertainty.

Conclusion

Thailand's 7% VAT is extended for another year (until September 30, 2025). This decision was made in response to discussions on the economic situation in the country and is part of the strategy to stimulate the economy. If you have any questions about how upcoming changes will affect your business activities, you can contact our company’s specialists for advice or business support in Thailand.