What to do if the income exceeds 1.8 million baht per year but still does not register VAT?

The annual tax-paying fest comes back again. Salarymen who earn more than 120,000 baht a year or have income from other channels of more than 60,000 baht a year will have to do their duty as Thai citizens to pay taxes. Especially those who have just realized tha they have income of more than 1.8 million baht without deducting expenses and it is overdue for VAT registration. What to do!? This time, ACU PAY will tell you how to prepare, the document used in registration, and the steps required to file a VAT registration.

What to do if you know that you have income more than 1.8 million per year?

Stop receiving money to the former account: In case an income earner files personal tax and is about to list the company as an individual account.
Check the statement: Check the total income from the date when the total income exceeds 1.8 million baht per year to see when the income started to exceed.
Calculate income: After that, calculate each month’s income to find the amount of taxes payable and fines payable.
Negotiate with Revenue officer: In case of late filing, a fine will be imposed on the Revenue Department. It is recommended that you should go and negotiate with the authorities according to your resident registration.

Example of late filing of VAT registration

In case an income earner has not registered VAT on time, the next step is to check the statement to see which date the income exceeds 1.8 million baht, and then calculate the excess income. The calculation formula is;

The income in excess of 1.8 million x VAT (7%) = back taxes payable

To submit P.P.30 for revenue since the date of income exceeding 1.8 million baht, there are also fines and surcharge arising from the delay in filing.

For example, in one year, Mr. A found himself earning less than 1.8 million baht from his business on February 1, 2023. Until December 15, 2023, Mr. A earned more than 1.8 million baht, totaling 2,800,000 baht.

The income in excess of 1.8 million (1,000,000) x VAT (7%) = 70,000

It means that Mr. A will pay a back tax of 70,000 baht, but if he does not apply for the VAT registration, he will face fines following the period from the first date that the income exceeds 1.8 million baht until the date of the VAT registration or the date that the Revenue Department found out. He must pay a fine starting from 2-20% and a surcharge of 1.5% per month.

Documentation to be prepared when registering into the VAT system

Value-added tax registration can be made in two ways: file with the local revenue office or submit it online for convenience without having to travel.

In case of registration in paper form

3 copies of the application for VAT registration (P.P.30)
3 copies of request for notice of exercise of the right to apply for VAT registration (P.P.01.1) (In the case of income not exceeding 1.8 million baht but would like to register first.)
A copy of ID card
A copy of house registration
In the case of rental housing, there must be a lease agreement, maps/photographs in front of the house and inside to show that there is an actual place of business.

In case of online registration

Go to the Revenue Department website at www.rd.go.th. Click ‘Corporation’ When entering the Corporation Related Services screen, select ‘Value-added tax’.
Click ‘Internet VAT Registration Service System’.
When entering the VAT-SBT ONLINE screen, select Value Added Tax Registration Service.
In case the entrepreneurs whose income exceeds the registration requirement of 1.8 million baht or who are exporters, click P. P. 01 and select ‘Confirm Registration’, then fill in the information in the P.P. 01 form.
Once approved as a VAT-registered business, the operator is responsible for issuing tax invoices, preparing input and output tax reports monthly, and filing a P.P. 30 by the 15th of the following month.

What will happen if the income exceeds 1.8 million baht per year but still does not register VAT

If we choose not to register VAT when the income exceeds 1.8 million baht, then the Revenue Department will prepare to levy back taxes. There are also legal fines and tax penalties as follows:

They will be liable to pay twice the amount of tax payable in the taxable month for the whole period of not registering VAT or equal to 1,000 baht per tax month and pay a surcharge of 1.5 % tax per month.
They have to pay VAT by themselves if they do business related to the sale of goods or services, which cannot be collected from customers, and cannot issue tax invoices because they do not have VAT registration.
The value-added tax collected by shops or entrepreneurs who have registered VAT cannot be used as an input tax to deduct from the taxable VAT because the VAT collected does not fall under the input tax.

Those who have just realized that their income exceeds 1.8 million baht per year should quickly check and prepare documents, calculations VAT payable, and fines from late VAT registration, then file the VAT registration correctly. Don’t think that the Revenue Department won’t know, because if the Revenue Department finds out, it will not only be subject to a 2-20% penalty and a surcharge of 1.5% but also to a legal fine.

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