VAT and withholding tax basics for Thai SMEs
This is a general overview, not tax advice. Rules change and every business is different, so always confirm your own situation with your accountant or the Revenue Department.
Most Thai SMEs handle the same handful of documents. Understanding how they connect makes bookkeeping much less stressful.
1. Quotation
A quotation states what you will deliver and at what price. It is the start of the paper trail. When a customer accepts, the quotation becomes the basis for your invoice, so it helps if the two are linked instead of typed twice.
2. Invoice and tax invoice
An invoice asks the customer to pay. If your business is VAT-registered, you also issue a tax invoice that shows the VAT amount separately. Keeping a proper sequence of documents and accurate customer details saves time later, when you need to report.
3. Double-entry bookkeeping
Every transaction affects at least two accounts: for example, a sale increases revenue and either cash or money owed to you. Posting these entries by hand is slow and error-prone. Automatic double-entry, where a document posts itself to the books, removes most of that work.
4. The VAT report (ภ.พ.30)
VAT-registered businesses file a monthly VAT return called ภ.พ.30. It compares the VAT you charged customers with the VAT you paid on purchases. If your tax invoices and purchase records are organised, preparing the figures is straightforward.
5. Withholding tax and the 50 ทวิ certificate
In some payments, the payer withholds a portion of the amount as income tax and pays it to the Revenue Department on the recipient's behalf. The payer then gives the recipient a withholding tax certificate, known as 50 ทวิ, showing what was paid and what was withheld. Recipients keep it as evidence of tax already paid.
6. More than one company
If you run more than one company, keeping each set of books separate but manageable from one place saves switching between tools.
Where software helps
The real gain is connection: a quotation that becomes an invoice, an invoice that posts to the books, books that feed the VAT report. The Upsize ERP is built around exactly this flow for Thai SMEs, including ภ.พ.30 figures, 50 ทวิ certificates and multi-company support.