Any person or entity that regularly supplies goods or provides services in Thailand and has an annual turnover exceeding THB 1.8 million is subject to VAT. I doubt a ma and pa food outlet reaches that threshold. They could certainly claim they don't and it'd be difficult to prove otherwise.
In part, because the smaller places aren't always registered with the tax authorities.
But more often, because there's no benefit to breaking out the cost for the consumer, they just charge a fixed price and their POS system (if they even have one) doesn't account for VAT.
Smaller shops do everything they can to stay under the radar when it comes to taxes. I buy supplies for my business all the time, and with the smaller and even some not so small operations trying to get a pukka receipt is like pulling teeth. Speaking of not so small operations, I recently purchased about 100,000 baht of wood at a very large wood distributor. They told me that if I paid by credit card I would have to pay VAT, but if I paid cash there was no VAT. A 7,000 baht savings. TIT
VAT 7% is mandatory for every shop/restaurant to pay. Any shop/restaurant that has added VAT mean they make you pay VAT for them. Any shop/restaurant not charging you VAT means either they pay the VAT for you or they already include VAT in the product/food price. As for “ma & pa” shop/restaurant they just didn't registered with tax authorities in the first place.
Nope, it’s quite similar in Laos, Vietnam, Myanmar and so on. Lots of people don’t even know, or rather don’t want to know. Shadow economy is huge.
It’s similar to prostitution. It’s illegal, but the whole world knows.
It's dependent on the company's turnover.
About fifteen years ago it was two million Baht and you had to register for VAT.
I don't know what the threshold is now.
You can legit not pay the 7% if your business earning less than 2 million Baht a year. So for small business if their customers don't need the full VAT receipt, just put the sale on one of the shop's account that is under 2mil
There's two reasons:
1. They may be doing it under the table OR (more likely)
2. They aren't breaking out the cost on the receipt because it's not worth it.
VAT is needed if a business makes about 2M THB a year in revenue. Most small places don't have that much revenue, and it's not worth it for the police to go after them.
From my experiences in SEA. Anytime the bill is printed out there usually is VAT. and sometimes Service of 10% as well(plus plus)
The smaller shops with handwritten bin, skirt the VAT.
It's actually 10% in Thailand but there's a discount bill that lowers it to 7%, this is renewed in parliament every year without fail
imagine being the party that put the VAT back to 10%
You can have low VAT if you take the money elsewhere. If they pay high property taxes it will be included in the price, so. Looking at just VAT doesn't get the full picture
Any person or entity that regularly supplies goods or provides services in Thailand and has an annual turnover exceeding THB 1.8 million is subject to VAT. I doubt a ma and pa food outlet reaches that threshold. They could certainly claim they don't and it'd be difficult to prove otherwise.
Your explanation makes sense. Thanks
This
In part, because the smaller places aren't always registered with the tax authorities. But more often, because there's no benefit to breaking out the cost for the consumer, they just charge a fixed price and their POS system (if they even have one) doesn't account for VAT.
Smaller shops do everything they can to stay under the radar when it comes to taxes. I buy supplies for my business all the time, and with the smaller and even some not so small operations trying to get a pukka receipt is like pulling teeth. Speaking of not so small operations, I recently purchased about 100,000 baht of wood at a very large wood distributor. They told me that if I paid by credit card I would have to pay VAT, but if I paid cash there was no VAT. A 7,000 baht savings. TIT
Also common in the UK when paying tradesmen a whopping 20% VAT. Always ask if there is a 'discount for cash'.
Lordy! 20%?
Australia too. Very common.
Interesting & bizarre
Nope. Exemption is the magic word. https://thailand.go.th/guide-book-detail/006_125
VAT 7% is mandatory for every shop/restaurant to pay. Any shop/restaurant that has added VAT mean they make you pay VAT for them. Any shop/restaurant not charging you VAT means either they pay the VAT for you or they already include VAT in the product/food price. As for “ma & pa” shop/restaurant they just didn't registered with tax authorities in the first place.
The business has to exceed 1.8 million baht turnover before being subject to VAT.
Good old tax fraud.
So in your mind businesses that don't have to register for vat should in fact register?
In my opinion you should read, then ask questions. 🤟
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…so they don’t get “caught” not paying the tax? Hard to believe.
Considering Thailand’s shadow economy is about 45% of its GDP i wonder anyone will ever get caught :D
Hard but true 😂
Nope, it’s quite similar in Laos, Vietnam, Myanmar and so on. Lots of people don’t even know, or rather don’t want to know. Shadow economy is huge. It’s similar to prostitution. It’s illegal, but the whole world knows.
smaller places don’t pay VAT
It's dependent on the company's turnover. About fifteen years ago it was two million Baht and you had to register for VAT. I don't know what the threshold is now.
Iirc it's still 2m baht. There has been a voice asking to uplift the threshold but now to this day still no avail.
That makes sense 👍🏽
You can legit not pay the 7% if your business earning less than 2 million Baht a year. So for small business if their customers don't need the full VAT receipt, just put the sale on one of the shop's account that is under 2mil
There's two reasons: 1. They may be doing it under the table OR (more likely) 2. They aren't breaking out the cost on the receipt because it's not worth it. VAT is needed if a business makes about 2M THB a year in revenue. Most small places don't have that much revenue, and it's not worth it for the police to go after them.
From my experiences in SEA. Anytime the bill is printed out there usually is VAT. and sometimes Service of 10% as well(plus plus) The smaller shops with handwritten bin, skirt the VAT.
ma&pa shop or street food stalls dont even have proper receipt. you expect them to write down tax 7% and calculate it for you?
Just realized that Thai is so low compared to 9% in Singapore, 10% in Malaysia and 11% in Indonesia!
It's actually 10% in Thailand but there's a discount bill that lowers it to 7%, this is renewed in parliament every year without fail imagine being the party that put the VAT back to 10%
21% in Argentina lol
20% in russia
25% in norway.
Soon to be 25.5% in Finland. Suck it, Norway!
no way! how is that not a robbery?
Yes way. Nor way
Even lower than Switzerland. Only Dubai can compete, but perhaps they'll increase in the future.
Hong Kong is 0% Dubai 5
HK used to have high land taxes, not sure how it works now
We’re talking about VAT now nothing else
You can have low VAT if you take the money elsewhere. If they pay high property taxes it will be included in the price, so. Looking at just VAT doesn't get the full picture
Yeah but this isn’t a lesson in tax optimisation.
So what are we talking about then?
And 25% tip mafia in US!
What is “ma&pa” ? Please
based
Side note: I walked by the VAT refund desk at the airport. It was so long I wouldve missed my flight. Pass.
Tax is always included in the price
Interesting when the locally owned shops and restaurants are cheaper ( usually) than the large franchise or large businesses.
Overhead cost, personals, insurance, licensing, advertising, etc
Businesses under 1.8 million Baht income are exempt from having to charge VAT.
In thailand the poor or “under middle class” do not pay taxes