Thailand has a unique tax system that has been established since 1992 called VAT, or ‘Value Added Tax’. Just as the name suggests, this is a tax on any value added during each stage of production and distribution of a good or service. There is a chance that you can pay more for VAT than what is actually charged. In these situations, you can qualify for a VAT refund. There are a few steps you need to take in order to get money back.
Thailand recognizes that it’s a very popular destination for tourists. With so much foreign traffic flowing throughout the country, they wanted a way to benefit from it. One way to benefit is financially. The more money that visitors spend in Thailand, the better the country can develop to support the tourist demand.
Step One: Shop at Stores Who Qualify for VAT Refunds for Tourists
The VAT refund system for tourists is a way to encourage tourists to shop in the country. Thailand offers 7% refund for goods and services that are purchased in Thailand but ultimately consumed when you leave. This excluded your hotel and restaurants that you visit while in the country. Stores have clearly visible signs about their eligibility for VAT refund for tourists. Seeing these signs are the first step to qualifying for the refund. There are of course exceptions such as prohibited items, firearms, gemstones, and more. Be sure to check a complete list of VAT item exceptions before making a purchase if you’re expecting to get a refund back.
Step Two: Spend at least 2,000 Baht
Just as there are requirements for the types of items that you purchase for the VAT refund, there are also requirements for the cost of the goods. From any given shop that you will be getting a refund from, you must have spent a minimum of 2,000 Baht in the same day. Also the total amount of the cost of goods or services must be more than 5,000 Baht. These minimums are in place to make it worthwhile for processing your refund.
Step Three: Tax Refund Form & Tax Invoice
It’s important to keep in mind your eligibility for the VAT refund while you shop. When you’re making your purchase, you’ll need to request a tax refund form called P.P.10 from the sales assistant at this time. The cashier will complete the form for you with the necessary information including the value of the purchase. You’ll need to also present your passport to them.
Step Four: Claim for a Refund at the Airport
Since the goods or services that you are requesting a refund for must be used outside of Thailand, you’ll essentially be traveling with them as you depart Thailand. You can only claim a VAT refund if leaving via any international airport in the country. You’ll present your tax refund forms and have the items inspected for approval. Depending on the amount of the refund, you can receive it in cash or credited directly to your credit card.
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