Buying a new or used car in Thailand - What VAT is charged?

[longwood50]

I am a bit confused on the VAT being charged on car purchases here in Thailand.  In the USA the VAT called Sales Tax is typically charged on the full purchase price of the car.  So if the tax rate is 7% and the car is $30,000 USD you get charged $2,100 in Sales Tax. 

If you are purchasing a new or used car here in Thailand is the VAT charged on the full purchase price.  I see several dealers indicating their prices include VAT and I find it difficult to believe they would be absorbing 7% of the purchase price.  

If I purchase a used car for lets say 600,000 baht, what would my VAT that would have to be paid to the transport.  I am aware there is also a transfer fee and registration. 

 

[Faz]

As far as I'm aware VAT is only charged once on a new vehicle or motorcycle and is inclusive of the price quoted. No VAT charged on sale or purchase of private second hand vehicles, but may be different at a dealership.

[Shark]

Everything I've bought in Thailand was the price as listed.

[ThailandRyan]

1 hour ago, Faz said:

As far as I'm aware VAT is only charged once on a new vehicle or motorcycle and is inclusive of the price quoted. No VAT charged on sale or purchase of private second hand vehicles, but may be different at a dealership.

If you buy a new vehicle and pay the entire amount at purchase without financing anything there should be no VAT charged.  I have purchased 3 vehicles, paid cash for them, and never paid VAT.  On a used vehicle I have no idea if there is VAT charged if buying from a dealership as used.  If it is from a individual seller then there should be no VAT paid either.

[AussieBob]

14 hours ago, ThailandRyan said:

If you buy a new vehicle and pay the entire amount at purchase without financing anything there should be no VAT charged.  I have purchased 3 vehicles, paid cash for them, and never paid VAT.  On a used vehicle I have no idea if there is VAT charged if buying from a dealership as used.  If it is from a individual seller then there should be no VAT paid either.

My understanding is that if you buy a used car from an 'official' dealer, or you get a finance/loan, then you do pay VAT. That should be included in their listed price, but if you are an Expat that does not know what you are doing, then they could also try to add it again. But if you buy a used 'home car' from a private seller, or from one of those 'non-official' dealers, then there is no VAT involved - but watch out as that the unofficial dealer will probably try to add it and keep it.

That is why so many dealers in Thailand are actually not 'official' dealers - they are merely selling the car for another person - usually at an agreed price to the owner and the 'dealer' keeps whatever profit they can get. 

[Stonker]

On 8/24/2021 at 4:51 PM, ThailandRyan said:

If you buy a new vehicle and pay the entire amount at purchase without financing anything there should be no VAT charged.  I have purchased 3 vehicles, paid cash for them, and never paid VAT.  On a used vehicle I have no idea if there is VAT charged if buying from a dealership as used.  If it is from a individual seller then there should be no VAT paid either.

Sorry, but that's absolutely NOT correct.

VAT is charged on new vehicles, as is car tax depending on the type of vehicle, and import tax if applicable again depending on the type of vehicle.

You may not have been aware of it at the dealership, and neither may the cashier have been, but you were charged VAT.

 

VAT is not payable on second hand cars, whether bought for cash or financed - it makes no difference.

 

VAT can only be charged once unless the product is substantially changed, which doesn't apply to vehicles.  There was a proposal in 2014 under Yingluck to charge VAT on second hand cars in order to raise revenue as it was thought that it would be easy to do so, with the VAT charge being made at the DLT / re-registration point, not by dealers, but it never happened for a number of reasons.

[Stonker]

On 8/24/2021 at 2:49 PM, Faz said:

As far as I'm aware VAT is only charged once on a new vehicle or motorcycle and is inclusive of the price quoted. No VAT charged on sale or purchase of private second hand vehicles, but may be different at a dealership.

Spot on, but it makes no difference if the second hand seller / trader is a dealership or not.

 

On 8/25/2021 at 7:37 AM, AussieBob said:

My understanding is that if you buy a used car from an 'official' dealer, or you get a finance/loan, then you do pay VAT. That should be included in their listed price, but if you are an Expat that does not know what you are doing, then they could also try to add it again. But if you buy a used 'home car' from a private seller, or from one of those 'non-official' dealers, then there is no VAT involved - but watch out as that the unofficial dealer will probably try to add it and keep it.

That is why so many dealers in Thailand are actually not 'official' dealers - they are merely selling the car for another person - usually at an agreed price to the owner and the 'dealer' keeps whatever profit they can get. 

See above.  If any dealer is adding VAT on second hand vehicles they're just ripping you off and adding it to their profit.

[ThailandRyan]

32 minutes ago, Stonker said:

Sorry, but that's absolutely NOT correct.

VAT is charged on new vehicles, as is car tax depending on the type of vehicle, and import tax if applicable again depending on the type of vehicle.

You may not have been aware of it at the dealership, and neither may the cashier have been, but you were charged VAT.

VAT is not payable on second hand cars, whether bought for cash or financed - it makes no difference.

VAT can only be charged once unless the product is substantially changed, which doesn't apply to vehicles.  There was a proposal in 2014 under Yingluck to charge VAT on second hand cars in order to raise revenue as it was thought that it would be easy to do so, with the VAT charge being made at the DLT / re-registration point, not by dealers, but it never happened for a number of reasons.

looking at my bill of sale from my April purchase the line where the VAT would be located is blank, as the dealer indicated VAT would not be charged if paid in full, but would be charged if paid monthly.  The same with my Motorbike purchase in August of last year. Could be they just wrote it off and reduced the amount they made on the profit, who knows, but all 3 of my purchases were like this.  VAT section of the Bill of sale/receipt is empty.  Unsure of why as I said, just going by what the general manager told me.  

Edited August 28, 2021 by ThailandRyan

[ThailandRyan]

Again here is more information, my dealer definitely did something in order to still pay the VAT, but must have taken it from the profit margin they had.  The car I bought was a new MG HS Turbo X listed at 1,199,000 Baht, sold to me for 1,031,000 Baht, with extras added.  It was bought during the Big car show here in Bangkok.  The same was done for my Yamaha X-Max.  Bike was priced at 168,000 Baht and I paid 162,000 Baht for it, with a few add-ons as well, including 2 Yamaha helmets.

 

I did find this article which explains it a bit more.

https://www.expatden.com/thailand/buy-car-in-thailand/

One negative for used cars is the 7% VAT that’s added to the bill if you buy from a showroom or used car dealer, or use a loan to finance the purchase.

So it is charged if the car is financed or purchased from a dealer, but not a private seller.

"To avoid this payment, you can pay in cash from a private seller. Buying from a private seller who has looked after their car is an excellent choice. Thai people call these “house cars.”

 

Edited August 28, 2021 by ThailandRyan

[ExpatPattaya]

Ahhh another post about the love affair with the internal combustion engine,  Pollutes the air we breath, makes money only for big oil and big auto, and ruins your health as you forget you have legs to walk or bicycle. 

Come to Thailand and change your lifestyle I say, forget the cars, motorcycles, and house with garage. 

Live simply and spend your money on pleasurable activities is what Thailand is about (no vehicle necessary)

Peace

[gummy]

Just now, ExpatPattaya said:

Ahhh another post about the love affair with the internal combustion engine,  Pollutes the air we breath, makes money only for big oil and big auto, and ruins your health as you forget you have legs to walk or bicycle. 

Come to Thailand and change your lifestyle I say, forget the cars, motorcycles, and house with garage. 

Live simply and spend your money on pleasurable activities is what Thailand is about (no vehicle necessary)

Peace

Nothing to do with the ICE, just you attempting to deflect this post for your own opinion to be heard. This post is about VAT on new or used cars in Thailand and unless you have your head up your backside both ICE and EVs are sold in Thailand and maybe subject to VAT

[ThailandRyan]

2 minutes ago, ExpatPattaya said:

Ahhh another post about the love affair with the internal combustion engine,  Pollutes the air we breath, makes money only for big oil and big auto, and ruins your health as you forget you have legs to walk or bicycle. 

Come to Thailand and change your lifestyle I say, forget the cars, motorcycles, and house with garage. 

Live simply and spend your money on pleasurable activities is what Thailand is about (no vehicle necessary)

Peace

Sure, give your money to public transport which also uses fuel or fly on a plane and use fuel as well to get from Point A to Point B.  Of course unless your begpacking across the country by foot, most would use a bus which belches black smoke as well, you could live the free lifestyle you ascribe in your post.

[ExpatPattaya]

8 minutes ago, gummy said:

Nothing to do with the ICE, just you attempting to deflect this post for your own opinion to be heard. This post is about VAT on new or used cars in Thailand and unless you have your head up your backside both ICE and EVs are sold in Thailand and maybe subject to VAT

THe VAT question was already answered so yes, I posted my opinion on ICE's

[gummy]

Just now, ExpatPattaya said:

THe VAT question was already answered so yes, I posted my opinion on ICE's

So deliberate deflection and no it has not been fully answered as there is no link to government VAT vehicle charges has yet been posted.

[Stonker]

56 minutes ago, ThailandRyan said:

looking at my bill of sale from my April purchase the line where the VAT would be located is blank, as the dealer indicated VAT would not be charged if paid in full, but would be charged if paid monthly.  The same with my Motorbike purchase in August of last year. Could be they just wrote it off and reduced the amount they made on the profit, who knows, but all 3 of my purchases were like this.  VAT section of the Bill of sale/receipt is empty.  Unsure of why as I said, just going by what the general manager told me.  

No, they didn't "write it off", they were just using it as a ploy to get you to pay cash rather than finance, or to charge you more than the low finance rate offered by major manufacturers.

There is no possible way to avoid VAT on new vehicles if they're liable for VAT.

[ThailandRyan]

17 minutes ago, Stonker said:

No, they didn't "write it off", they were just using it as a ploy to get you to pay cash rather than finance, or to charge you more than the low finance rate offered by major manufacturers.

There is no possible way to avoid VAT on new vehicles if they're liable for VAT.

As you say, they must have taken it obviously from somewhere to pay it as I have no receipt showing it was paid by myself. No ploy to get me to pay cash, as I was never going to finance the vehicle anyway.  Why finance something if you find you have the money and the price is right.  No skin off of my back, I just know that my receipts show no VAT paid on the VAT line.  They must have taken it from their profit margin is my view and since I did not finance it they made it work for them instead of the bank or MG finance making any money off of the financed interest.

[Stonker]

The VAT's built into the price on new cars, like all other taxes, not shown separately, and not something a dealer would be involved in in any way - they don't have any input to this at all.

 

Their profit margin is simply the difference between what they pay the company and what they charge you - VAT and car taxes aren't separate items they have any say in or leeway with.

 

The ploy of showing VAT separately may not have been aimed at you, but would have been standard for all customers.

The only way you'll ever find out how much VAT was paid would be to export the vehicle and to try to claim it back - good luck if you do!

 

... and sorry, but the idea that VAT's charged on second hand cars from dealers but not from private sellers is just plain wrong - that the website you linked to wants you to pay them for access to more information on this should have rung a warning bell .

[ThailandRyan]

No use in exporting a right hand side driven car to another country that I would head to if things go south here.  Even heading to Myanmar, I would sell the car here in Thailand first as they drive on the opposite side of the road.

[AussieBob]

This is from the Thai Revenue Office:  Value Added Tax | The Revenue Department (English Site) (rd.go.th)

Good luck finding anything useful about VAT for Used Cars - I dont really care so I didn't bother too much trying to find anything. 

I did find an article in a newspaper from 2014 saying they wanted to impose VAT on sales of used cars, but nothing else since then, except that they have increased the VAT on new cars.

This is from a recent article: Pandemic Becomes a New Opportunity for Used Car Dealers in Thailand as New Car Sales Drop due to Buyer's Limited Budget: Ken Research (prnewswire.com)

• One negative for used cars is the 7% VAT that's added to the bill if the customer buys from a showroom or used car dealer, or use a loan to finance the purchase.

I stand by my earlier statement - VAT is payable on used cars if bought from a 'dealer' or if finance is used. But remember in Thailand, basically only the 'official' dealers in Thailand are what is known as dealers in the west. In Thailand you can lease a yard and put up signs and sell cars - but you dont have to be a  car  'dealer' to do that. 

 

 

[Stonker]

3 hours ago, AussieBob said:

I did find an article from a newspaper from 2014 saying they wanted to impose VAT on sales of used cars ...

I mentioned that before, detailing that the plan was to charge VAT at the DLT and that it never happened.

3 hours ago, AussieBob said:

... except that they have increased the VAT on new cars

Sorry again, @AussieBob, but that hasn't happened.

VAT is a flat rate of 7% except for items that are exempt or zero rated.  That hasn't changed, although it may do at the end of next month.

3 hours ago, AussieBob said:

I stand by my earlier statement - VAT is payable on used cars if bought from a dealer or if finance is involved.

You can stand by whatever you want, but that doesn't make it correct!

The VAT payable "if finance is involved" is payable on the loan / finance / service, not the vehicle. They're obviously connected, but they're two different things for VAT.

3 hours ago, AussieBob said:

But remember in Thailand, basically only the 'official' dealers in Thailand are what is known as dealers in the west. In Thailand you can lease a yard and put up signs and sell cars - but you dont have to be a  car  'dealer' to do that. 

Sorry, again, but this is a complete fallacy.

 

If you're talking about new cars, then, just like the West, only franchised dealers can sell new cars  - no-one in Thailand can just "lease a yard, put up signs and sell new cars" as without a franchise the manufacturers won't supply them with any.

 

If you're talking about used cars, again it's no different from the West and there's no such thing as an " 'official' " second hand car  dealer either in Thailand or in the West.  Some in both, though, are franchised and approved by a manufacturer, which is presumably what you're referring to, like Toyota Sure.

 

Anyone, in Thailand or the West, can "lease a yard, put up signs and sell cars" and they're a car dealer (and liable for tax - in Thailand usually after the first six months). 

Some may be approved and franchised by a manufacturer, like Toyota Sure, but most won't be.

 

There's no difference between Thailand and the West on this.

 

[AussieBob]

57 minutes ago, Stonker said:

I mentioned that before, detailing that the plan was to charge VAT at the DLT and that it never happened.

Sorry again, @AussieBob, but that hasn't happened.

VAT is a flat rate of 7% except for items that are exempt or zero rated.  That hasn't changed, although it may do at the end of next month.

You can stand by whatever you want, but that doesn't make it correct!

The VAT payable "if finance is involved" is payable on the loan / finance / service, not the vehicle. They're obviously connected, but they're two different things for VAT.

Sorry, again, but this is a complete fallacy.

If you're talking about new cars, then, just like the West, only franchised dealers can sell new cars  - no-one in Thailand can just "lease a yard, put up signs and sell new cars" as without a franchise the manufacturers won't supply them with any.

If you're talking about used cars, again it's no different from the West and there's no such thing as an " 'official' " second hand car  dealer either in Thailand or in the West.  Some in both, though, are franchised and approved by a manufacturer, which is presumably what you're referring to, like Toyota Sure.

Anyone, in Thailand or the West, can "lease a yard, put up signs and sell cars" and they're a car dealer (and liable for tax - in Thailand usually after the first six months). 

Some may be approved and franchised by a manufacturer, like Toyota Sure, but most won't be.

There's no difference between Thailand and the West on this.

Perhaps you are right - but I still dont agree with you stonker because my experience and understanding is different to what you are saying.  But rather than arguing further, I have sent a request to the 'dealer' I bought my last car from. When I get that reply back I will respond again.

[Stonker]

1 hour ago, AussieBob said:

I have sent a request to the 'dealer' I bought my last car from. When I get that reply back I will respond again.

No need to bother on my part !

 

If it was a franchised dealer it's out of their hands, and if it was a second hand car salesman I'd trust one here as much as I would one in the West.

 

If you're disagreeing over whether VAT rates have changed for cars, or anything else like that, then disagree away as I can't be bothered with it.

[AussieBob]

3 hours ago, Stonker said:

No need to bother on my part !

If it was a franchised dealer it's out of their hands, and if it was a second hand car salesman I'd trust one here as much as I would one in the West.

If you're disagreeing over whether VAT rates have changed for cars, or anything else like that, then disagree away as I can't be bothered with it.

Too late - email sent. And I want to know anyway - makes a difference next time I buy a car.

[Stonker]

1 hour ago, AussieBob said:

And I want to know anyway - makes a difference next time I buy a car.

How?

You can't get the VAT back, so whether you pay it or not what practical difference can it possibly make???

 

TBH, I can't see why anyone's interested apart from out of academic interest.

 

 

[AussieBob]

11 hours ago, Stonker said:

How?

You can't get the VAT back, so whether you pay it or not what practical difference can it possibly make???

TBH, I can't see why anyone's interested apart from out of academic interest.

The difference 'it can possibly make' is that if I know the facts (and the poster and anyone else reading this), then I/we can ensure I/we am not ripped off by a Thai dealer/reseller.  And of course - so that I can ensure that I am correct in the statements that I made - that is important to me. But clearly it is not to you - so I will leave you alone with my answer to the post's question:  Buying a new or used car in Thailand - What VAT is charged?

If someone makes a post and you think it is totally irrelevant and you cannot see 'why anyone's interested apart from out of academic interest', then may I suggest you refrain from entering the discussions to tell people they are wrong, if you are not interested in learning that you are wrong - unless you have some definitive proof that they are wrong.  Mate - it is all about exchanging opinions and advice, and this one is someone seeking advice so I want to make sure I am right (or wrong).