On 09 Jan 2015 Thailand's Director-General of Revenue issued Notification on VAT (No 205) prescribing directors services are not subject to VAT.

This Insight updates you about the issuance of DGN VAT (No 205).

The Thailand Law

The Thailand Revenue Code Section 77/2 VAT law prescribes a commercial services transaction as a transaction that is subject to VAT.

And as the Revenue Code's Section 40(2) income tax law prescribes directors fees as hire of work (services) income, the Revenue Department's tax audit officers have for a long while, thought of directors as being providers of commercial services for which their directors' fees are subject to VAT.

But Thailand's Civil and Commercial Code law prescribes services provided under a hire of labor transaction is for one's own labor for which Thailand's Revenue Code prescribes as being exempt from VAT.

Under Thailand laws, are directors fees really hire of work (services) income, or are directors fees really hire of labor income?

The Director-General's Notification on VAT (No 205)

On 09 Jan 2015 Thailand's Director-General of Revenue issued Notification on VAT (No 205) prescribing:

• Pursuant to Section 77/1(10)(c) of the Revenue Code the Director-General prescribes, with the Minister's approval, that the activities of Directors of public limited companies and private limited companies are not services transactions for the purposes of VAT.

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