You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

August 6, 2026

Know Your Supplier: Protecting Input VAT in Thailand’s Digital Economy

Subscribe to Updates

Every month, VAT-registered businesses in Thailand calculate their output and input VAT and file a return to pay the net amount due or claim a refund. Yet a common and costly dispute arises when a business that has paid input VAT to its supplier—and done everything asked of it—later finds that input VAT rejected on the grounds that the tax invoice was issued by “a person not entitled to issue tax invoices.”

In these cases, a buyer may have confirmed the supplier’s VAT registration on the Revenue Department’s website, paid through the banking system, received a complete tax invoice, and kept full payment and inventory records. Even so, if the Revenue Department later determines that the supplier did not genuinely make the sale or collected the VAT without remitting it, the department can disallow the input VAT and assess additional tax, surcharge, and penalty—often more than a year after the transaction.

A new article from tax and dispute resolution specialists at Tilleke & Gibbins in Bangkok examines how the Revenue Department and the courts approach these disputes, including two recent Supreme Court (Tax Division) decisions confirming that the taxpayer bears the burden of proving a supplier genuinely sold and delivered the goods and received payment. It considers why the VAT registration system offers no legal safe harbor, why the evidentiary burden falls hardest on online and cross-border transactions where buyers and sellers never meet, and how the Revenue Department’s own digital infrastructure could detect non-remitting suppliers at the source rather than shifting the loss to good-faith buyers.

The article also sets out practical guidance: how to build a comprehensive “know-your-supplier” file at the time of a transaction, the procedural steps and strict deadlines for challenging a VAT assessment, and why dispute readiness belongs alongside tax planning at the center of a business’s tax strategy.

Read the full article through the button below.

Download Full Article
Related Professionals

Practices

Dispute Resolution and Litigation

Tax

Location

RELATED INSIGHTS​ 

March 8, 2022
On February 15, 2022, Thailand’s cabinet approved in principle a package of incentives to promote electric vehicle (EV) adoption in Thailand, with the aim of making the country an EV manufacturing hub in Asia. A week later, the cabinet approved further draft regulations including specific information on customs duty reductions and exemptions for certain types of imported EVs. The plan includes both tax and non-tax incentives from 2022 until 2025. In the first two years (2022–2023), the package incentivizes the widespread use of EVs in Thailand by providing exemption or reduction of import duties and excise tax, as well as subsidies to increase the demand for EVs and attract investment in the EV industry. These incentives will cover the importation of completely built up (CBU) cars and motorcycles, and the local manufacturing of completely knocked down (CKD) vehicles in Thailand. For the following two years (2024–2025), the plan promotes the use of domestically produced EVs by eliminating the exemption or reduction of import duties for CBU vehicles while maintaining the other incentives (e.g., reduced excise tax rates, and subsidies). The aim of this is to make the cost of CBU vehicles higher than locally produced vehicles to encourage operators to produce EVs in the country to meet increasing demand. Additional measures encourage the manufacturing of EVs in Thailand, including exemption of import duties for parts imported between 2022 and 2025, and treatment of the value of imported battery cells as a cost of local manufacturing (up to 15% of an EV’s retail price). This is beneficial to local manufacturers of EVs, as their activities will be entitled to a more generous incentive package than importation of EVs. At their meeting on February 22, 2022, Thailand’s cabinet further approved draft subordinate regulations, including specific reductions and exemptions of customs duty
Read More
February 25, 2022
As internet availability and speeds have taken off in Thailand, more and more consumers in the country have adjusted their behavior by purchasing products through websites and online applications. However, they sometimes find that not all transactions turn out as expected. As online sales have increased, the number of disputes over these transactions has also continued to grow. Local news outlets are now reporting on the latest official response to this trend: a new division of the Civil Court designed to cope with the growing number of disputes from online transactions. The Honorable Chief Justice Piyakul Boonperm, president of Thailand’s Supreme Court, is aiming to expand internet shoppers’ access to justice by setting up a special division to work on cases involving online transactions. The announcement of the formation of this division was published in the Government Gazette on December 20, 2021, and the Civil Court announced shortly after that it would start operating on January 27, 2022. The announcement does not affect cases filed prior to January 27, 2022, and does not revoke plaintiffs’ rights to file cases through alternative legal means. The special division handles only disputes between buyers and sellers in an online transaction over a legal right or obligation related to consumption of goods or services in accordance with section 3(1) of the Consumer Procedural Act B.E. 2551 (2008) on what the law called “consumer cases.” This also includes bodies that can act on a consumer’s behalf by law, such as a consumer protection commission, association, or foundation approved by the Consumer Protection Commission. Only cases that can be handled remotely through the court’s electronic system fall within the scope of this announcement—cases that cannot be completely handled online will not be taken up by the new special division. Accordingly, parties must utilize the court’s
Read More
January 28, 2022
On January 28, 2022, the government of Vietnam issued Decree No. 15/2022/ND-CP guiding the tax reduction and exemption policies to support post-pandemic recovery (Decree 15). Decree 15 was issued to implement the National Assembly’s Resolution No. 43/2022/QH15 dated January 11, 2022, on fiscal and monetary policies for the recovery of the national economy from the complications of the ongoing COVID-19 pandemic. Notably, Decree 15 sets out tax relief for value-added tax (VAT) and corporate income tax (CIT). Various kinds of goods and services will be entitled to a reduced VAT rate of 8% (instead of the current 10%) for the period from February 1 until December 31, 2022. The reduction is applicable for both methods of VAT payment (i.e., the deduction method and the direct method). It is worth noting, however, that telecom services, banking and financial services, real estate business, as well as goods and services subject to special consumption tax are not eligible for this relief measure. Details of the goods and services which are not entitled to VAT rate reduction are listed in the appendices attached to Decree 15. With regard to CIT, grants and donations of enterprises and organizations to COVID-19 control operations in Vietnam will be deducted from taxable income when calculating the CIT of the tax period of 2022. The amount of grants or donations must be confirmed in writing (including via electronic means) by the receiving authority or agency. Decree 15 takes effect on February 1, 2022. It should be noted that there may be further guiding circulars after the enactment of the decree. Therefore, it is recommended that businesses keep a close watch on any further implementing guidance of Decree 15.
Read More
January 27, 2022
Thailand and Vietnam are major destinations for foreign direct investment (FDI) in Asia, resulting in significant levels of cross-border transactions. According to the World Bank, in 2018 and 2019 Thailand attracted a combined net inflow of about USD 18 billion in FDI.  During the same period, net inflows to Vietnam were USD 31.62 billion. These high volumes of inbound investment inevitably lead to a higher risk of disputes with everyone from suppliers, contractors, joint venture partners, borrowers, and of course state-owned companies and government agencies. International arbitration is a viable means of handling such disputes. Both Thailand and Vietnam are contracting states to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”), so arbitral awards from other member states are enforceable. With this in mind, an international arbitration award has to be enforced. This usually means filing cases in the local Thai and Vietnamese courts. As explained in this report, both Thailand and Vietnam have legislative frameworks in place to enforce arbitral awards, but in practice, enforcement can be a challenging and time-consuming endeavor. Before electing to pursue arbitration against private and state entities, foreign investors should be aware of how awards are actually enforced in these emerging Asian jurisdictions. To read the full article, please download the report through the button below.   This article was first published in September 2021 by the Practising Law Institute as part of their course materials for International Investment Law & Investor-State Dispute Settlement 2021.
Read More