(4/2007)
The Revenue Department recently issued the Notification of the Director-General of the Revenue Department on VAT (No. 169) which provides two alternatives concerning VAT registration for a foreign company who sells goods in Thailand in its ordinary course of business through an agent in the free zone as follows:
1) The foreign company may choose not to apply for VAT registration for the following sales of goods in Thailand through an agent located in the free zone.
(a) Export of goods
(b) Sales of goods to an operator in the same free zone or in another free zone or in a bonded warehouse
(c) Sale of goods in the free zone to a buyer in Thailand where the buyer pays VAT on import of the goods into Thailand
2) However, a foreign company, which wished to be a VAT registrant, may choose to apply for a temporary VAT registration. The period of VAT registration is the period of time for which the agent acts for the foreign company. However, if the foreign company wishes to extend such period, it may file a petition for an extension of time before the expiration of the original period.
Although only registered VAT operators are entitled to the credit or refund of input VAT, there may be an administrative burden associated with VAT compliance. Where this burden would outweigh the benefit of registration, this Notification has provided the opportunity for a foreign company to be exempt from VAT registration.
