Stay informed about VAT registration before it’s too late.

A quick guide for entrepreneurs on VAT registration to make complex tax matters easy.

Stay informed about VAT registration before it’s too late.

A story someone posted on Facebook about her back taxes

"I was charged for back VAT, and the officer said I couldn’t pay in installments because the amount wasn’t considered large. The amount due is about 300,000 baht, and they told me to clear it by June 25.

The issue arose because I didn’t have any knowledge about taxes. I only knew that if I had income, I needed to file. Last year was the first year I filed online by myself. I reported 2.4 million baht based on my actual income, but my actual profit was only 20%, so I deducted 60% as expenses.

Then the Revenue Department called and came to my house, telling me that since my income exceeded 1.8 million baht, I had to pay VAT. I didn’t know this before and thought paying income tax was enough. The officer explained and told me to get my bank statements so they could calculate the VAT.

The officer said that I wouldn’t be allowed to pay in installments because I hadn’t managed this properly from the start — I should have known what taxes I needed to pay once I had that level of income. If I had known and managed it earlier, I wouldn’t have to pay such a large lump sum now. They also said that if I don’t pay, I’ll be fined double, meaning I’d owe nearly 900,000 baht.

What should I do? Should I just close my shop and let them come after me? If I refuse to pay, what will happen? I don’t have a lump sum to pay this."

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If your annual income exceeds 1.8 million baht, you are obligated to undertake VAT registration.

Important facts and recommendations to help prevent you from ending up in this situation again.

1. Manage cash flow in advance.

• Estimate the VAT payable (Net income × 7%) and set aside the tax payment each month to avoid a ‘shock’ when the deadline arrives.

• If your business is just starting or has fluctuating income, prepare a monthly income and expense budget to forecast taxes in advance.

  
  

2. Submit reports and pay VAT on time.

• You must always file the VAT return (Form Phor.Phor.30) and pay VAT by the 15th of the following month.

• Late filing will incur a fine of 200 baht per month per return, and interest of 1.5% per month on the outstanding VAT amount.

• If you truly cannot pay on time, contact the Revenue Department to request a tax installment payment (at the officer’s discretion). Although not all cases will be approved, you should contact them promptly.

3. Consult a tax expert from the beginning.

• If you are unsure about the criteria and methods for calculating VAT, seek services from a tax consultant or a licensed accountant (CPA) for assistance.

• Investing in consulting fees helps reduce the risk of paying fines and penalties in the future.

4. What to do immediately if you are charged back VAT.

• Collect sales and expense evidence to calculate the actual figures.

• Contact the local Revenue Department to confirm the correct VAT amount and inquire about installment payment conditions.

• Request a written clarification to use as evidence in case of disputes.

• Consider filing an appeal within 30 days from the date of receiving the notification letter.

• If you do not have a lump sum payment, negotiate to pay in installments by proposing a payment plan.

5. Don’t avoid it – don’t close your business and run away.

• Closing the business does not end your tax obligations. You still have to pay back VAT and interest, and the Revenue Department can enforce collection until the debt is fully settled. Therefore, it is better to negotiate clearly.

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