The Thailand VAT law specifically prescribes for transport services but it doesn't specifically prescribe for freight forwarder services.
For transport services, the Thai VAT law specifically prescribes:
A provider of domestic transport services is exempt from VAT;
A provider of international transport services by land is exempt from VAT; and
A provider of international transport services by aircraft or ship is subject to 0% VAT.
But a provider of freight forwarder services isn't specifically prescribed. Instead, as managers, organizers or facilitators of transport services or supply chain or logistic services providers, a provider of freight forwarder services falls under the Thailand VAT law as a general services provider.
And whilst the VAT law Section 80/1(2) permits a general services provider to apply the 0% rate of VAT for:
Services provided in Thailand and used/consumed in foreign countries,
the Thailand Revenue Department has determined that because the services of a freight forwarder are:
Services provided in Thailand and used/consumed in Thailand (not used /consumed in foreign countries),
then the services of a freight forwarder are not entitled to the 0% rate of VAT.
Sherrings recognizes that this might be different to the treatment that applies in other countries and points this out for freight forwarder companies to note.
Our Tax Insights and Updates are general information publications focusing on the laws for meeting tax compliance obligations, and tax rights and entitlements under the laws.