What is Value Added Tax (VAT)?

Value Added Tax (VAT) is an indirect tax collected on the sale and purchase of goods and services. The seller collects the tax from the buyer and remits it to the Revenue Department. The current tax rate is 7%.

Who is required to register for Value Added Tax?

Businesses with annual sales revenue from goods or services exceeding 1.8 million Baht must register for VAT with the Revenue Department.

How is Value Added Tax calculated?

If VAT is not yet included: VAT = Product Price × 7%. If VAT is already included: VAT = (Price Including VAT × 7) ÷ 107.

What goods or services are exempt from VAT?

Examples include fresh food, medical expenses, tuition fees, house rent, etc., which are often exempt to help reduce the public's burden.

Are imported goods valued under 1,500 Baht subject to VAT?

Effective January 1, 2025, imported goods priced between 1-1,500 Baht (including shipping costs) will be subject to VAT, according to an announcement from the Customs Department.

How do you remove 7% VAT from the total price?

Use the formula: Price Before VAT = Price Including VAT ÷ 1.07. For example: If a product's price including VAT is 1,070 Baht → Price Before VAT = 1,070 ÷ 1.07 = 1,000 Baht.

When is it necessary to remove VAT from the product price?

It is necessary when separating the tax amount for accounting, such as recording sales figures excluding VAT in financial reports or issuing itemized tax invoices.

Withholding Tax and VAT Calculator

Examples of withholding tax rates

Rate 5%

Rental Income
Prize Winnings
Performance Fees

Rate 3%

Service fee
Professional fee
Copyright fee

Rate 2%

Advertising Expense

Rate 1%

Shipping Cost
Service fee withheld through the "e-Withholding Tax"

Value Added Tax (VAT) is an indirect tax that consumers pay when purchasing goods or services. Businesses are responsible for accurately calculating and collecting this tax. VAT is a 7% tax calculated on the value of goods or services at each stage of production until they reach the consumer. VAT-registered businesses are obligated to charge tax on their sales, pay the difference between their output tax (tax on sales) and input tax (tax on purchases), and file a tax return every month.

How to calculate VAT

✅ If you know the price before VAT
Formula:
Price Including VAT = Product Price × 1.07
Example:
Product price: 1,000 Baht VAT = 1,000 × 7% = 70 Baht
Price Including VAT = 1,070 Baht

✅ If you know the price including VAT
Formula:
Value Added Tax (VAT) = (Price Including VAT × 7) ÷ 107
Example:
Product price including VAT: 2,140 Baht
VAT = (2,140 × 7) ÷ 107 = 140 Baht