VAT Refunds for Exporters

For many exporters the process of refunding the VAT is a drain on the cash flow, time consuming, intrusive, creates uncertainty and a distraction from managing the day to day business operations.

Keywords: Mazars, Thailand, Tax, VAT Refund, Exporter, Revenue Department

4 February 2013

And most significantly of all, the refund received may be less than the amount of VAT paid. Creating an additional cost to the business and reducing its competitiveness against global competitors.

In Thailand a request for a VAT refund is likely to trigger a VAT audit from the Thai Revenue Department. For the Revenue Department the audit is viewed as a necessary process to minimise tax fraud but with limited staff and extensive procedures it can also create long delays before businesses receive the VAT refunds. In some cases it has been known that a business receives no refund and is liable to additional VAT with surcharges and penalties levied on top. Nevertheless, it is necessity for exporters to request VAT refunds since exports are subject to VAT at zero percent and it is the only way to claim back the VAT on purchases.

The Revenue Department has recognised the needs of exporters and created ‘good exporters’ and ‘registered exporters’. Both classes of exporters are eligible to receive VAT refunds far quicker than the normal process. Under Revenue Department Notification No. Thor. 159/2550 the VAT refunds will be processed as follows:

  • ‘Good exporters’ – within 15 – 45 days (15 days for exporters filing VAT returns via e-filing and 45 days for exporters filing VAT returns at a Revenue Department office).
  • ‘Registered exporters’ – within 30 – 60 days (30 days for exporters filing VAT returns via e-filing and 60 days for exporters filing VAT returns at a Revenue Department office).

To be eligible for this scheme, business must meet the following criteria:

 Good Exporters

  • Limited company or public company (VAT registered).
  • Paid-up registered capital of THB 10 Million or more (except for exporters with a gold card* status granted by the Thai Custom’s Department).
  • Exports account for not less than 70% of the total sales in the last 12 months prior to submitting the ‘Good Exporter Application Form’, or not less than 50% for the exporter with a gold card*. Exports includes the sales of goods between business operators who are carrying on business in an export processing zone (EPZ), whether or not they are in the same zone.
  • Continuous operations and must own immovable property e.g. land, building, factory, etc.
  • Net assets exceed net debt in the last accounting period prior to submitting the ‘Good Exporter Application Form’.
  • Member of a commercial association or private organisation, e.g. Federation of Thai Industries, Thai Chamber of Commerce, etc. and such association or organisation can verify the credibility and reliability of the company's financial status.

* Gold card exporter scheme is a measure launched by the Thai Custom’s Department to improve the custom’s procedures and boost exports.

Registered Exporter

  • Juristic company, partnership or an individual (VAT registered).
  • Exports account for not less than 50% of the total sales in the last 12 months prior to submitting the ‘Registered Exporter Application Form’. Exports includes the sales of goods between business operators who are carrying on business in an export processing zone (EPZ), whether or not they are in the same zone.
  • Continuous operations and must own immovable property e.g. land, building, factory, etc.
  • Net assets exceed net debt in the last accounting period prior to submitting the ‘Registered Exporter Application Form’.
  • Member of a commercial association or private organisation, e.g. Federation of Thai Industries, Thai Chamber of Commerce, etc. and such association or organisation can verify the credibility and reliability of the company's financial status.

For more information, please read Revenue Department Notification No. Thor. 159/2550.

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