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Revenue Department Simplifies Procedures for VAT Registration

To expedite the process of establishing business operations in Thailand, the Director-General of the Revenue Department announced new rules and procedures for submitting and issuing VAT registration forms through the Department of Business Development (DBD). Effective from April 20, 2020 onwards, business-owners wishing to incorporate and register a new legal entity and sell goods or provide services subject to VAT may submit both applications to the DBD simultaneously.

The new rules and procedures, a collaboration between Thailand’s Revenue Department and Department of Business Development, constitute a significant process improvement which reduces the waiting period between incorporating a new business and registering it with the VAT system. Previously, the forms for business registration and VAT registration had to be submitted to the two authorities separately, and applicants were required to wait for their business registration to be approved by the DBD before applying for VAT registration with their local Revenue Department office. Under the new rules, the submission and approval of applications is now synchronized: companies who submit both of their applications to the DBD in accordance with established procedures will become incorporated businesses and VAT registrants at the same time.

For further information about filing for VAT registration and business registration under the new rules, such as the preparation of supporting documents or proper completion of application forms, please contact Mahanakorn Partners Group at  info@mahanakornpartners.com

 

Rules and procedures regarding the submission and issuance of VAT registration forms through the Department of Business Development (DBD)

Announcement of the Director-General of the Revenue Department Regarding VAT (Issue 234)

By virtue of Section 85(4), of the Revenue Code, as updated by the Revenue Code Amendment Act (No. 30) 1991, the Director-General has announced rules and procedures regarding the submission and issuance of VAT registration forms through the Department of Business Development (DBD). The new rules and procedures are as follows:

Article 1. Business-owners who wish to register a business with the DBD and sell goods and services that are subject to VAT have the right to submit both applications together through the DBD in accordance with the form that is attached to this Announcement. 

Article 2. Businesses under Article 1 have the right to apply for VAT registration through the DBD before business operations commence when:

1.   The business-owner has a work plan proven to be ready for the sale of goods or services that are subject to VAT, and

2.   There are preparations for business operations that require the purchase of goods or services subject to VAT, such as the construction of factories or office buildings, or machine installation.

Business-owners under Paragraph 1 must apply for VAT registration through the DBD within six months before business operations commence, unless there is evidence detailing the construction of a factory or office building, machine installation, or similar activities. If so, business-owners have the right to submit the VAT registration form within a reasonable timeframe while construction or installation occurs.

Article 3. Business-owners who will operate businesses exempt from VAT, as specified in Section 81/3 Paragraph 1 of the Revenue Code, must notify the Director-General of the Revenue Department of their status in their application. 

Article 4. Business-owners must submit their VAT registration form to the DBD and include a complete and correct list of supporting documentation. They must also submit supporting documents according to the form attached to this Announcement, and be prepared to show original documents to Revenue Department officials. 

Article 5. Revenue Department officials must check VAT registration forms for correctness and completeness before issuing a VAT registration to the business-owner. 

Revenue Department officers shall not issue VAT registrations to business-owners who do not have a complete application or have an application with the following characteristics:

1.   The business-owner submitted a fraudulent application for VAT registration through the DBD;

2.   The business-owner or the person acting on their behalf is not authorized to act for the business owner;

3.   The business location, as stated in the VAT registration, is fabricated or incorrect;

4.   The business-owner lists the law firm or accounting office of another person as their business location, unless the firm or office is acting as the representative of an business-owner residing outside the Kingdom;

5.   The business-owner does not actually operate a business selling goods or providing services that are subject to VAT, or is not the actual owner of the business; or

6.   The business-owner does not produce the documents and evidence specified under Article 2 and Article 4 when requested by a Revenue Department Officer.

Article 6. The Revenue Department officer shall issue VAT registrations (VAT 20) for businesses with multiple locations. A VAT registration shall be issued for each location.

Article 7. The business will be registered from the date of filing for VAT registration through the DBD, except when the Revenue Department officer cannot issue the VAT registration because it meets conditions under Article 5 Paragraph 2. In that case, the business will not be registered.

When a business has multiple locations, but only submits a VAT registration form for its headquarters and does not specify other locations in its application, the business’s headquarters and its other locations will still be registered on the same day. 

Business-owners may use a printed copy of their VAT registration and reference number from the Revenue Department website until they receive the original document (VAT 20).

Article 8. The persons authorized to issue VAT registrations are as follows:

1.   The Area Revenue Office, or the person assigned by the Area Revenue Office, responsible for the area where the business is located. 

2.   The Director of Large Business Tax Administration Division, or the person assigned by the Division, for business-owners who are under the supervision of the Large Business Tax Administration. 

Article 9. This announcement is effective for filing for VAT registration from 20 April, 2020 onwards.

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