Whether you are a tourist or an expat, you are eligible to get tax refunds in Thailand. If you are working in Thailand and paying taxes, you will certainly be eligible for a tax refund. As tourists, you can avail of tax refund benefits on the VAT you have paid while making your purchase during your trip to Thailand. However, this is simply generic information. Let us guide you through the eligibility and process of a tax refund in Thailand for foreigners.
- Eligibility for VAT Refund for Tourists in Thailand
- Process of VAT Refund in Thailand for Tourists
- Procedure for Getting Tax Refund in Thailand
- Conclusion
Eligibility for VAT Refund for Tourists in Thailand
Foreigners who visit Thailand and purchase goods from participating retail stores are eligible for a VAT (Value-Added-Tax) refund. In order to be eligible for the tax refund, tourists must meet the following conditions:
- They have to purchase goods from a participating retail store that displays a “VAT Refund for Tourists” sign.
- The total value of the goods purchased must be at least 2,000 baht, including VAT.
- They have to purchase goods within 60 days prior to departure from Thailand.
- They have to carry the goods out of Thailand within 90 days from the date of purchase.
- The foreigner must present a valid passport and departure boarding pass or e-boarding pass, and fill out the VAT refund application form at the participating retail store at the time of purchase.
It is important to note that certain goods such as jewelry, gold bars, and electronic appliances are not eligible for a VAT refund. Additionally, the VAT refund amount is subject to a handling fee charged by the VAT refund service provider.
Process of VAT Refund in Thailand for Tourists
As a tourist in Thailand, you can get a Value Added Tax (VAT) refund on purchases made during your stay. The process for obtaining a VAT refund in Thailand generally involves the following steps:
Look for shops or retailers displaying the “VAT Refund for Tourists” sign
Many shops and retailers in Thailand participate in the VAT refund program. Look for the “VAT Refund for Tourists” sign in the store or ask the store staff if they participate in the program.
Shop and collect your receipts
You must spend at least 2,000 baht (including VAT) per store per day to be eligible for a VAT refund. Collect all of your receipts for eligible purchases.
Request for VAT Refund Application Form
Request a VAT Refund Application Form from the store staff when you make your purchase. Fill in the required details in the form.
Present your passport
You need to present your passport to the store staff to prove that you are a tourist.
Get your VAT refund paperwork
The store staff will give you a VAT refund form that you need to keep safe until you leave Thailand.
At the airport
When you are leaving Thailand, go to the VAT Refund Office at the airport before you check in your luggage. Present your passport, your purchases, and your VAT refund forms to the officer. You may also need to present your boarding pass.
Get your refund
Upon approval of your application, the officer will give you a refund in cash or credit to your credit card.
Please note that there are some restrictions and conditions for VAT refunds in Thailand. For example, you must leave Thailand within 60 days of the purchase, and not all goods are eligible for VAT refunds. Also, there is a handling fee charged by the VAT refund company for each refund, and the refund amount may be subject to a deduction of the handling fee and other taxes.
Eligibility of Foreigners to Get Tax Refund in Thailand
A foreigner becomes a tax resident in Thailand whenever he/she stays in the kingdom for more than 180 days and earns a living here. Normally, the Thai employer withholds the tax applicable, but, in the case of self-employment or business, things are a little different.
In order to avoid paying too much in taxes, the tax rate, or the monthly withheld tax, may be changed if a person does not work in Thailand for 12 consecutive months. This is done by adjusting the monthly withheld tax to reflect the projected actual yearly income for that year (based on the actual months of work).
The following year, the taxpayer can receive a tax refund if they overpay tax because of its computation on a full 12-month basis.
How long a foreign national will actually work in Thailand during the entire tax year must be continuously monitored in order to avoid paying any additional taxes. If there are any changes from the previous month, there are monthly deduction adjustments in accordance with the latest annual tax rates.
So the only eligibility criteria for a foreigner or a foreign business to be eligible to get a tax refund in Thailand is their 180 days of earning in Thailand. Let’s check the Process now!
Procedure for Getting Tax Refund in Thailand
Foreigners who are tax resident in Thailand needs to follow the following steps in order to file a tax refund in Thailand:
First Step: Obtain the TIN
Obtain the ten-digit Tax Identification Number (TIN) from the Revenue Department of Thailand.
Second Step: Prepare Documents
Prepare all the documents that you need to file a Tax Refund in Thailand. For your assistance, the following is the list of documents you need:
- The Personal Income Tax Refund Letter (Form Kor 21) from The Thai Revenue Department.
- Draft a Power of Attorney under the following conditions:
- Written in the Thai language;
- Signed by the principal taxpayer, an attorney, and two witnesses;
- A certified true copy of the passport of the taxpayer holding legalization approval from the Royal Thai Embassy in the taxpayer’s native country;
- Must mention the TIN of the principal taxpayer.
- Tax ID card of the Taxpayer
- Taxpayer’s Passport and Work Permit
This list of documents is applicable under general conditions. For any type of special circumstances, we recommend that you consult with a reliable tax service provider in Thailand.
Third Step: File Your Refund
The Tax Refund procedure is initiated from designated banks. You have to look for some similar branches in your locality to initiate your tax refund process. Your tax attorney in Thailand will be the right person to help you in this process.
Wrapping Up
As a premium accounting and tax service provider in Thailand, we do hear about various challenges that foreigners face while filing their tax returns. Please keep in mind that Thai tax laws are very strict and any type of discrepancy in the filing mechanism can lead to severe outcomes. Remember the following facts:
- Any Thai or foreign company that has been carrying on an active business in Thailand, must submit tax returns or payments twice a year.
- The Ministry of Finance administers the majority of tax collections
- Import and export duties are collected by the Customs Department
- The local authority is responsible for collecting the property and municipal tax
If you are planning to evade the Thai tax mechanism, you are thinking of landing yourself in trouble. Consult us today to file your personal or corporate income tax refund successfully in Thailand. Simply email us your requirements at [email protected], henceforth, our tax professionals will take care of everything on your behalf!
