Thailand VAT Calculator

Adding VAT to a pre-VAT price

Extracting VAT from a price that already includes it is where most people get the arithmetic wrong. The instinct is to multiply by 7%, and that is simply not correct. Take a total of 1,070 baht: multiply it by 7% and you get 74.90, but the actual VAT is 70. The error is nearly 5 baht on a small purchase, and it grows in proportion to the amount. This calculator handles both directions correctly.

Adding VAT is the easy direction. Take the price before tax, multiply by the rate to get the VAT, then add it back. An item priced at 1,000 baht carries 1,000 × 7% = 70 baht of VAT, for a total of 1,070 baht.

Removing VAT is where the mistake happens. The correct method is to divide the VAT-inclusive total by 1.07 to get the price before tax, then subtract that from the total to get the VAT.

The reason you divide by 1.07 rather than multiplying by 7% is that the 7% is calculated on the price before tax, not on the total. When all you have is the total, you have to work back to the original base first. A total of 1,070 divided by 1.07 gives 1,000, so the VAT is 70.

An equivalent method that gives the same answer is to multiply the total by 7 and divide by 107. Accountants often prefer this because it is easier to do mentally.

Who has to register for VAT. A business with more than 1.8 million baht a year in sales of goods or services must register for VAT with the Revenue Department. Once registered, it must issue a tax invoice on every sale, collect VAT from customers, and remit it monthly by the 15th of the following month.

Input and output tax. A VAT-registered business does not hand over everything it collects. It offsets the output tax collected from customers against the input tax it paid on its own purchases, and remits only the difference. If input tax exceeds output tax, it can claim the difference back. This is why the tax is called value added tax — at each stage only the value added is taxed.

Exempt goods and services. Not everything carries VAT. Unprocessed agricultural produce, education, medical treatment, property rental and certain domestic transport are exempt.

Getting VAT back as a visitor. Thailand refunds VAT to departing tourists, and the conditions are specific enough that people miss out on a technicality. You must not hold Thai nationality, not be a permanent resident, not be crew on a flight leaving Thailand, and you must depart from an international airport. Buy from shops displaying the VAT REFUND FOR TOURISTS sign, spend at least 2,000 baht including VAT at one shop on one day, and ask at the till for the refund application form (P.P.10) together with the original tax invoices — show your passport at the time of purchase, not afterwards. The goods must leave Thailand with you within 60 days of purchase.

Two further steps catch people out at the airport. If your purchases total 20,000 baht or more, you must show the goods to a Customs officer before you check in. And luxury items — jewellery, gold ornaments, watches, glasses, pens, phones, laptops or tablets, handbags, wallets, purses and belts worth 40,000 baht or more each, or any carry-on item worth 100,000 baht or more — have to be shown again at the VAT Refund office after you pass immigration. Do not put those in checked baggage.

The refund is worked out from a banded table published by the Revenue Department and a fee is deducted, so you receive less than the VAT shown on the invoice. That table is published as an image rather than as text, so this page does not reproduce the figures — the link is in the references below.