Guidelines for Issuing Credit and Debit Notes

Credit and debit notes must be prepared in compliance with the Revenue Code because they are reported in the monthly VAT returns. This summary is to help companies understand how to correctly issue an accounting record that is frequently misused.

Keywords: Mazars, Thailand, Accounting, Credit Note, Debit Note, VAT, Tax Invoice, Revenue Code

10 September 2013

Credit Note

A credit note is issued to adjust or to amend errors in a sales invoice which has already been issued and sent to a customer.

Objective of issuing credit note:

  • Unit price overcharged
  • Goods returned or goods rejected by customer
  • Discounts given after the invoice is issued
  • Product wrongly shipped
  • To write-off customer short payments

Credit note should contain at least the following:

  • The document should be headed “Credit Note”
  • Name, address and VAT registration number of the supplier
  • Name and address of the customer
  • Date of issuing the credit note
  • Number and date of the original tax invoice
  • The reason for its issue (for example, “returned goods”)
  • Description of why this credit note is being issued
  • Show the correct pricing, quantity and product type
  • Total amount credited, excluding VAT
  • Rate and amount of VAT credited

Tip: The purpose of a credit note is not to credit an invoice that has not been paid by the customer.

Tip: The net amount should be the credit given to the customer, adjusted against the original tax invoice amount.

Debit Note

A debit note is similar to an invoice and is issued to increase the value of the sale of goods or services performed and its related VAT.

Objective of issuing a debit note:

  • Increase an undercharged tax invoice
  • Difference between billed and actual quantity of the invoice
  • Interest on late payment from customers

Debit note should contain at least the following:

  • The document should be headed “Debit Note”
  • Name, address and VAT registration number of the supplier
  • Name and address of the customer
  • Date of issuing the debit note
  • Number and date of the original tax invoice.
  • The reason for its issue (for example, “under billed”)
  • Description of why the debit note is being issued
  • Show the correct pricing, quantity and product type.
  • Total amount debited, excluding VAT
  • Rate and amount of VAT debited

Beware: Many companies simply re-issue the original invoice with an adjustment or issue an invoice for the incremental amount, rather than correctly issue a debit note.

VAT

Both the issuer and receiver shall include the input and output VAT from the debit and credit notes on the monthly VAT return (PP 30).

Please visit the Revenue Code .

Want to know more?