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A typical case assembled from practice; details are changed.
A Thai company has to register for VAT once its taxable turnover passes 1,800,000 baht in a year. The application goes to the Revenue Department within 30 days of crossing that line, and from then on the company charges VAT at 7% and files a monthly PP.30 return. Here's how a small Phuket business caught the crossing in time and registered inside the 30-day window, and what changed on contracts already priced in US dollars.
The situation
The company styles listings and manages bookings for owners who rent out villas and condos on Phuket. One director is American and works in the business on a work permit; the other is Thai. Thai owners are billed in baht; a few overseas owners pay a flat monthly fee by wire transfer in US dollars. The business brought in around 140,000 baht a month for the first five months. In June it signed three new listing-management clients, and turnover jumped to about 380,000 baht a month. The bookkeeper converted the dollar invoices to baht once a quarter, so nobody had a running total for the year.
Catching the threshold despite the dollar invoices
The directors asked us to look at a new management agreement, and our lawyers added up turnover month by month instead of quarter by quarter. The running total passed 1,800,000 baht on 18 August, by the invoice dates, so the 30-day registration window closed on 17 September.
| Period | Turnover that period | Running total since January | What it meant |
|---|---|---|---|
| January–May | about 140,000 baht/month | 700,000 baht by end of May | Nowhere near the threshold |
| June | 380,000 baht | 1,080,000 baht | New listing contracts started |
| July | 380,000 baht | 1,460,000 baht | About 340,000 baht short of the line |
| August | 380,000 baht | 1,840,000 baht | Threshold crossed on 18 August; the 30-day clock started |
Missing that date would have meant registering late, with a 1.5% monthly surcharge on the unpaid tax, capped at the tax itself, plus a possible penalty of up to twice the tax.
What was filed and when
- We fixed the crossing date from the invoice record — 18 August — and counted 30 days from it.
- We prepared the registration application and filed it with the Revenue Department before 17 September.
- We put PP.30 on the calendar: due by the 15th of the next month, the 23rd if filed online, even for a month with no sales.
Pricing, bookkeeping and the dollar contracts
Neither the baht contracts nor the dollar ones said whether VAT was included in the price.
Because these services relate to villas and condos in Phuket, we treated them as used in Thailand and charged the standard 7%, even for overseas clients. Services actually used abroad can qualify for the 0% export rate, but that depends on the facts of each contract and needs checking with the Revenue Department.
Take a $3,000-a-month retainer with a US-based owner. If VAT is baked into that price, the company keeps $2,804. If VAT is added on top, the client pays $3,210 and the company nets the full $3,000 — about $196 a month, roughly $2,355 a year on a single contract.
We drafted a short letter about the registration and addenda for every contract, in both currencies, adding "plus 7% VAT" as a separate line. New contracts now carry VAT on its own line rather than folded into the headline price, and the bookkeeper now converts the dollar invoices to baht every month instead of every quarter, so the running total stays current.
The result
The company registered within 30 days of the crossing date and filed its first PP.30 on time, with no surcharge. The Thai clients accepted the "plus VAT" addendum without objection. Two of the three dollar clients signed the same addendum; the third keeps VAT inside the price until the contract renews. Another case may turn out differently — the outcome depends on the paperwork and the Revenue Department's decision.
A quick check for your own company
- Do you track turnover by month, in baht, even for invoices issued in another currency?
- Do your contracts say whether VAT is included or added separately?
- Is PP.30 already on your bookkeeper's calendar, including months with no sales?
If your turnover is getting close to the threshold, send us your monthly sales in baht and your current client contracts. We will work out the date you are likely to cross the line and flag which contracts to amend first. We reply within 24 hours, and we agree the cost of the work before we start.
Our approach to setting up a company is on the page about company registration in Thailand, with the general steps and capital rules in our guide on how to register a company in Thailand. More on owners' other questions: starting a business in Thailand and our overview of Thai taxes. A company like this one might have started the way it's described in the typical case "A company and a work permit in 6 weeks".
