- How do I extract 7% VAT from a total?
- Divide the VAT-inclusive total by 1.07 to get the price before VAT; the VAT is the difference. For 10,700 baht, the price before VAT is 10,000 and the VAT is 700. The formula is VAT = total × 7 ÷ 107.
- Is withholding tax calculated before or after VAT?
- On the amount before VAT. For a 10,000 baht service plus 7% VAT (10,700 total), 3% withholding is 300 baht, so the payer transfers 10,400 and gives the payee a withholding tax certificate (50 Tawi).
- Which withholding tax rate should I use?
- Common rates for payments to companies are 1% for transport, 2% for advertising, 3% for services and hire of work, and 5% for rent. The right rate depends on the type of payment and who is paid, so check with the Revenue Department or your accountant.
- Why is Thai VAT 7% and not 10%?
- The law sets VAT at 10%, but it has been reduced to 7% by decree and the reduction has been extended repeatedly. You can type any rate if it changes.