Reading the rulings
Instead of reading the tax laws, I would like to recommend that you read the tax rulings instead. The tax rulings are letters issued by the Revenue Office in reply to a taxpayer who asks for advice or confirmation about tax procedure.
I always use tax rulings as tools in studying tax laws and apply them to our business. When I have some questions about tax, I will search for a number of tax rulings on similar cases and see how the Revenue Department deals with these, then I will follow the same advice in the tax ruling and keep the ruling in my special tax file.
When the time comes for an audit, the tax officer, at first sight, will often say that we did something wrong and have to pay tax and a penalty because of it. Then I will say "wait a moment, I did nothing wrong. Everything is in accordance with the tax ruling," and show them the ruling in my file. After that, the tax officer will understand and say OK.
There may be times that you will need a tax ruling for your own business, I recommend that you go to the legal department of the Revenue Office in your area and seek verbal advice on your case. If the answer is beneficial for you, then send the same question in an official letter to the regional tax office (Phuket is Region 11, and the office in Surathani).
When you submit your letter, you will get a registration number that you can refer to for follow ups, but it can take between six and 12 months to get the reply, therefore, please apply for a ruling only if the issue has a high tax impact to your business.
You can apply for regular tax ruling updates from the Revenue Department (only Thai language version available) by becoming an etaxinfo member. Email email@example.com for details.
Below is a sample of tax ruling regarding a problem with VAT registrationtion:
Rev. Rul. No. Gor Khor 0811/Phor.
7024 - Dated 23 November 2000
Re: Application to be a VAT registrant retroactively
Facts & Questions
The Partnership carried on the manufacturing and selling of car equipment and provided services in metal shaping and plastic fabrication. The Partnership wished to pay VAT and appointed one of its employees to be a representative in registering VAT on 1 May 2000. Due to the incompleteness of the attached documents required for registration of VAT, the Revenue Officer did not register VAT and the employee did not inform the Partnership.
The Partnership understood that the VAT registration was completed and issued the output tax and filed Form Phor. Por. 30 from May 2000 with no intention of breaking the law since it did not know that it had no right to do so. Later on, the Revenue Officer informed that the Partnership had not yet registered for VAT.
The Partnership filed Form Phor.Por.01 for VAT registration on 27 July 2000 by specifying that 1 May 2000 was the first date of its business and paid the penalty for late registration. The Revenue Region 6 allowed the VAT registration to take effect retroactively to 1 May 2000 since the Partnership had no intention of avoiding tax and it was a mere misunderstanding of the Partnership.
Although the Partnership was not a VAT registrant during May to July 2000 and issued VAT invoices and filed the tax return Form Phor. Por. 30 by mistake, it misunderstood the facts and had no intention of avoiding VAT payment. Therefore, the Partnership was allowed to be a VAT registrant retroactively from 1 May 2000 (Section 85 paragraph 4 of the Revenue Code).