On 02 Oct 2002, Thailand's Director-General of Revenue issued Instruction No Paw 116/2545 adding 3 more examples of services that are out of scope of the Thailand VAT law.

This Tax Insight has been updated for Instruction No Paw 116/2545.

The Thailand VAT Law

Under Section 77/2 of Thailand VAT law, the following services transactions are subject to VAT:

• Services provided in Thailand and consumed in Thailand; and
  
• Services provided in a foreign country and consumed in Thailand.
  

And therefore:

• Services not provided in Thailand and not consumed in Thailand; or
  
• Services provided in a foreign country and not consumed in Thailand;
  

are not subject to VAT under Section 77/2 (i.e. out of scope of Thailand VAT).

The Director-General's Guiding Examples

Following the issue of Instruction No Paw 116/2545 the Director-General's list of guiding examples for services that are out of scope of Thailand VAT is as follows:

1. When a company in a foreign country provides a sales agency service for a company in Thailand for sales of goods in foreign countries; 
   
2. When a company in a foreign country provides loan procurement services to a company in Thailand for borrowing money in foreign countries; 
   
3. When a company in a foreign country provides money collection services to a company in Thailand for goods sold in foreign countries; 
   
4. When a company in a foreign country provides worldwide marketing and reservation services to a company in Thailand for the Thailand company’s hotel rooms; 
   
5. When a company in a foreign country provides worldwide TV advertising for a company in Thailand*; 
6. When a company in a foreign country provides advertising services in the Sawasdee magazine for a company in Thailand, which magazine is mainly for the Thai Airways international flights but which is also available on the Thai Airways domestic flights*; and 
7. When a company in a foreign country provides advertising services in a foreign magazine, which magazine is distributed worldwide but which is also available in Thailand*.

* As added by Departmental Instruction No Paw 116/2545 issued on 02 Oct 2002

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