Tax Advisory

Case Study: Navigating Complex BOI Regulations to Secure a 100% VAT Refund of Over THB 10 Million Client: A leading international manufacturer of electronic components, operating under a Board of Investment (BOI) promotion. Industry: Manufacturing & Export Services: VAT Refund Services, Tax Advisory

Client:

manufacturer of electronic

Website:

–

Date:

August 14, 2022

Category:

Tax Strategy

01. Сhallenge

Our client, a BOI-promoted exporter, accumulated a significant input VAT credit of over THB 10 million. This was due to their business model: purchasing raw materials and capital goods locally (incurring 7% VAT), while 100% of their sales were exports (subject to 0% VAT). This resulted in a substantial amount of cash being tied up with the Revenue Department, severely impacting their working capital and operational cash flow.

The client’s in-house team was hesitant to proceed with the refund claim due to:

Regulatory Complexity: The VAT refund process for BOI-promoted companies is subject to intense scrutiny and requires deep knowledge of both Revenue Department regulations and BOI privileges.
High Risk of Rejection: A single error in documentation or filing could lead to the rejection of the entire claim, triggering a full-scale tax audit and potential penalties.
Resource Drain: The process required a significant investment of time and resources to prepare and defend the claim, which they could not afford to divert from their core operations.

02. Solutions

SiriAudit.com (Siri Group Phuket) was engaged to manage the entire VAT refund process, with the goal of securing a 100% refund in the most efficient way possible.

Phase 1: Proactive Due Diligence Before submitting any documents, we conducted a comprehensive internal audit of the client’s VAT system. This involved reviewing every historical VAT filing (P.P.30), verifying thousands of input tax invoices against strict Revenue Department criteria, and cross-referencing all purchases with the client’s BOI-approved raw material and machinery lists.

Phase 2: Dossier Preparation We compiled an impeccable, audit-proof dossier for the Revenue Department. This included systematically organizing all supporting documents, preparing detailed reconciliation reports that clearly linked input VAT to specific export shipments, and drafting a comprehensive cover letter explaining the legal basis for the refund claim under BOI and Revenue Code provisions.

Phase 3: Strategic Liaison with the Revenue Department Our team acted as the primary point of contact with the tax authorities. We proactively managed all official inquiries and accompanied the client during the tax audit sessions, providing immediate, clear, and well-documented explanations for every question raised by the tax officers.

03. Results

Our expert handling of the case delivered exceptional results, transforming a potential business risk into a significant financial victory.

100% Refund Success: We successfully secured the full VAT refund of over THB 10 million for the client, with no deductions or penalties. privileges.
Massive Cash Flow Injection: The refund provided a vital injection of working capital back into the business, allowing the client to invest in new inventory and accelerate growth.
Zero Distractions for the Client: Our end-to-end management of the process allowed the client's management team to remain 100% focused on their core manufacturing business.
Established Future Confidence: We established a streamlined monthly process for future VAT refund claims, ensuring timely cash recovery and ongoing compliance for the client.

“The VAT refund process in Thailand, especially with BOI privileges, was a major challenge for us. The team at Siri Audit handled the entire process with exceptional professionalism and meticulous attention to detail. Recovering over 10 million baht was a significant boost to our finances. We simply could not have done it without their expertise.”

– Chief Financial Officer