Complete Guide to VAT 7% in Odoo for Thai Businesses

In Thailand, VAT (Value Added Tax) is set at a standard rate of 7% and applies to most goods and services. For businesses, getting VAT right is not just about compliance it affects pricing, invoices, and monthly reporting.

If you’re using Odoo ERP, managing 7% VAT becomes much easier. This blog gives you practical steps to handle VAT correctly in Odoo, making your accounting faster and more reliable.

Who Needs to Pay VAT in Thailand?

✔ Businesses with annual revenue of more than 1.8 million THB must register for VAT.
✔ 7% VAT applies to most products and services.
✔ Certain services, like healthcare, education, and financial services, are VAT-exempt.

If you’re registered for VAT, you must also file a PP30 VAT report every month.

Steps to Install

1. Install Thai Localization

1. Go to Apps → Search for “l10n_th” (Thai Localization).
2. Click Install.

This will:
Install the Thai Chart of Accounts automatically

To check : Go to Accounting -> Configuration -> Taxes

Steps to Configure 7% VAT

Go to Accounting → Configuration → Taxes

Check the details:

Tax Name: VAT 7% (Sales) or VAT 7% (Purchase)

Tax Type: Sales / Purchase

Tax Scope: Services, Goods, or Both

Tax Computation: Percentage of Price

Amount: 7.00%

Tax Account: Choose the VAT Output Account (for sales) or VAT Input Account (for purchases)

Save the tax.

Setting Separate Taxes for Sales & Purchases

• Create two separate taxes:
  ✔ VAT 7% Sales – Output VAT
  ✔ VAT 7% Purchase – Input VAT

This separation helps with PP30 reporting and tracking VAT credit.

Assigning Taxes to Products & Vendors

For correct automatic VAT calculation:

• Go to Sales → Products → Edit Product
• VAT 7% Sales (Output VAT)
  • Used for Customer Invoices (sales).
  • This is the VAT you collect from customers and pay to the Revenue Department.
• VAT 7% Purchase (Input VAT)
  • Used for Vendor Bills (purchases).
  • This is the VAT you pay to vendors, which can often be claimed back as a tax credit.

Odoo keeps them separate because PP30 reporting needs to show:
✔ Output VAT (sales)
✔ Input VAT (purchases)
✔ Net VAT payable = Output VAT – Input VAT

This ensures Odoo automatically applies VAT on every sale or purchase.

Recording Sales & Purchase Transactions with VAT

Sales Invoice Example

1. Create a Customer Invoice.
2. Select the product (with VAT 7% assigned).
3. Odoo automatically calculates:
   • Tax-Included Price Calculation
   • Listed Product Price (Tax Included): 20 THB
   • VAT Rate: 7%
   • Base Price (without VAT): 20÷(1+0.07)=18.69THB20 ÷ (1 + 0.07) = 18.69 THB20÷(1+0.07)=18.69THB
   • VAT Amount: 20−18.69=1.31THB20 – 18.69 = 1.31 THB20−18.69=1.31THB
   • Total (Customer Pays): 20 THB (already includes VAT)

Purchase Bill Example

1. Create a Vendor Bill.
2. Select the product with VAT 7% Purchase.
3. Odoo records input VAT for tax credit.

Advanced VAT Functionalities

a) Handling VAT-Exempt Products

• Create a 0% VAT tax (VAT-Exempt) and assign it to exempt products.
• Useful for businesses with mixed taxable & exempt sales.

b) Credit Notes / VAT Refunds

• When issuing a credit note, Odoo automatically adjusts VAT amounts in reporting.
• Example: Refund of 1,000 THB → VAT adjustment of 70 THB (7%).

c) Multi-VAT Scenarios

• For businesses dealing with different VAT rates (e.g., promotional rates or future changes), you can create separate tax records and assign them to products.

d) VAT on Advance Payments

• When receiving advance payments, Odoo can apply VAT instantly by enabling Tax on Advance Payment in settings.
• This ensures compliance when VAT must be declared even before final invoicing.

Generating PP30 VAT Reports

The monthly PP30 report is mandatory in Thailand. Odoo simplifies this:

1. Go to Accounting → Reporting → Taxes → PP30 Report

1. Odoo shows:
   • Output VAT (Sales)
   • Input VAT (Purchases)
   • Net VAT payable or refundable

Export the report and submit directly to the Thai Revenue Department.

Common VAT Mistakes to Avoid

❌ Not separating sales & purchase VAT accounts.
❌ Forgetting to assign VAT to products.
❌ Manually editing VAT amounts in invoices.
❌ Ignoring VAT on advance payments, causing compliance issues.

Conclusion

Managing 7% VAT in Odoo is straightforward once set up correctly. Whether you use the preconfigured Thai Localization or prefer a manual setup for advanced control, Odoo ensures automatic calculations, correct PP30 reporting, and compliance with Thai tax laws.

📩 Need help setting up or customizing VAT in Odoo?
Contact Spellbound Soft Solutions, we specialize in Thai Odoo configurations and advanced VAT setups.