The provision of services rendered within Thailand is generally subject to 7% VAT. However, if the provision of services is considered as “exported” under Section 80/1(2) of the Revenue Code, zero-rated VAT treatment can be applied in line with the procedures and conditions as specified under the following Notifications:
– Notification of the Director-General on VAT (No. 105) dated 12 July 2000
Prior to 29 March 2011, the export of services must meet the following criteria:
- The provision of services is performed inThailandto the recipient of services in a foreign country, and
- The result of such services is delivered for use entirely outside Thailand.
– Notification of the Director-General on VAT (No.181) dated 29 March 2011
In accordance with the new Notification that has been effective since 29 March 2011, if the service is partially used in Thailand, the VAT operator (i.e. the service provider) is eligible for zero-rated VAT treatment only for the part of service that is used in a foreign country.
This new Notification introduces the concept of apportionment and allows for zero-rated VAT treatment for the portion of the services that is used outside Thailand.