This tutorial provides a clear breakdown of how to calculate VAT (Value-Added Tax) and WHT (Withholding Tax) in compliance with Thai tax laws. It also includes how discounts are handled in the calculations.
1. VAT Calculation (7%)
VAT is calculated as 7% of the price before VAT. To determine the VAT, follow these steps:
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Step 1.1: Calculate Price Before VAT
Use the formula: ฿Price Before VAT = ฿Total Amount ÷ (1 + VAT Rate)
Example: ฿292,008.27 = ฿312,448.85 ÷ 1.07 -
Step 1.2: Calculate VAT Amount
Use the formula: ฿VAT Amount = ฿Price Before VAT × VAT Rate
Example: ฿20,440.58 = ฿292,008.27 × 0.07
2. WHT Calculation (3%)
WHT is based on the price before VAT. The WHT rate depends on the type of service, and for services in Thailand, the standard rate is 3%.
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Step 2.1: Calculate WHT Amount
Use the formula: ฿WHT Amount = ฿Price Before VAT × WHT Rate
Example: ฿8,760.25 = ฿292,008.27 × 0.03
3. Grand Total Net
This is the final amount after deducting WHT from the total payment.
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Step 3.1: Calculate Grand Total Net
Use the formula: ฿Grand Total Net = ฿Total Amount - ฿WHT Amount
Example: ฿303,688.60 = ฿312,448.85 - ฿8,760.25
4. Handling Discounts
When a discount is applied, it must be deducted before calculating VAT. Here’s how to handle it:
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Step 4.1: Adjust Total with Discount
฿Adjusted Total = ฿Original Total - ฿Discount Amount
Example: ฿300,000.00 = ฿312,448.85 - ฿12,448.85 -
Step 4.2: Calculate VAT on Adjusted Total
฿Price Before VAT = ฿Adjusted Total ÷ (1 + VAT Rate)
฿VAT Amount = ฿Price Before VAT × VAT Rate
Example: ฿280,373.83 = ฿300,000.00 ÷ 1.07 ฿19,626.17 = ฿280,373.83 × 0.07 -
Step 4.3: Calculate WHT on Price Before VAT
฿WHT Amount = ฿Price Before VAT × WHT Rate
Example: ฿8,411.21 = ฿280,373.83 × 0.03 -
Step 4.4: Calculate Grand Total Net with Discount
฿Grand Total Net = ฿Adjusted Total - ฿WHT Amount
Example: ฿291,588.79 = ฿300,000.00 - ฿8,411.21
Summary of Key Formulas
| Component | Formula |
|---|---|
| Price Before VAT | ฿Total Amount ÷ (1 + VAT Rate) |
| VAT Amount | ฿Price Before VAT × VAT Rate |
| WHT Amount | ฿Price Before VAT × WHT Rate |
| Grand Total Net | ฿Total Amount - ฿WHT Amount |
| Adjusted Total (Discount) | ฿Original Total - ฿Discount Amount |
This method ensures accurate calculations for VAT, WHT, and any applied discounts, while complying with Thai tax regulations.