One of the biggest worries for small sellers is “Does a tiny shop / online store have to pay tax?” The short answer: if you earn income, you have a duty to file — but “filing” and “paying” aren’t the same thing, and most small shops pay less than they fear if they keep good cost records. This post explains it simply, without jargon.
Note: this is general information, not personal tax advice. Confirm your specific case with the Revenue Department or an accountant.
1. Earning from sales = a duty to file income tax
If you sell as an individual (not yet a registered company), sales income counts as assessable income you must report under personal income tax. Generally:
- A mid-year filing (PND.94) for first-half income
- A year-end filing (PND.90) for the full year
“Must file” doesn’t always mean “must pay.” If your income after expenses and allowances falls below the threshold, you may owe no tax — but you still need to file the return.
2. You can deduct expenses two ways
Trading income allows two ways to deduct expenses — pick whichever is better:
- Standard (flat-rate) — deduct a set percentage by business type (general trading often allows a 60% flat deduction). Convenient, no need for every receipt.
- Actual — deduct real costs and expenses, good for shops whose costs exceed the flat rate, but you need complete records (purchase receipts, shipping, rent, etc.).
The key point: if you keep good cost records, you can choose the option that pays less tax. (More on costs: How to calculate shop profit)
3. When must you register for VAT?
VAT is separate from income tax. The commonly cited threshold is when revenue (sales) exceeds ฿1.8 million per year — you must register for VAT within the required time.
- If sales are still under ฿1.8M/year, you generally don’t need to register for VAT yet (voluntary registration is possible for business reasons).
- Once registered, you take on extra duties, such as issuing tax invoices and filing PP.30 monthly.
So most small shops deal with “income tax” first; VAT comes later as sales grow to the threshold.
4. What to do starting today (whatever your income)
- Keep income and expense records complete, especially purchase receipts for restocking.
- Separate shop money from personal money so you know real income and tax is easy to work out.
- Log sales regularly instead of scrambling at year-end.
Record-keeping isn’t just about tax — it also shows your real profit. A tool like Posless logs sales and stores costs from receipt photos in one place, so at tax time you have your income and cost figures to look back on, no digging through notebooks. (See: Easy shop bookkeeping on mobile)
Frequently asked questions
Q: My online shop is small with little income — do I still file? A: If your assessable income reaches the filing threshold, you have a duty to file even if you end up owing no tax. Filing is safer than not filing.
Q: I get frequent bank transfers — can the Revenue Department see them? A: There are rules on reporting certain transaction patterns (e.g. a number of deposits / total amount per year reaching a threshold); banks report these to the Revenue Department. Filing correctly and keeping records is the safest path.
Q: I sell under my own name without a company — is that wrong? A: No, you can sell as an individual; you just need to file personal income tax correctly. Registering a company is an option as the business grows and there are tax/credibility reasons to do so.
Summary: Earning from sales means a duty to file income tax, but how much you actually pay depends on income after expenses. Most small shops aren’t yet at the VAT threshold (sales over ฿1.8M/year). Starting today, keep cost records, separate shop and personal money, and log sales regularly — so filing is easy and you see real profit at the same time.