Hotel tax is something an accommodation owner needs to understand from day one — tax for hotels and boutique resorts is more complex than for an ordinary business, because several different taxes apply at once: value added tax (VAT), signage tax, land and building tax, and withholding tax.
If you own a hotel in Chiang Mai, here is what you need to know.
1. Value Added Tax (VAT) for hotels
Revenue from room service and food served in a hotel is subject to VAT once annual revenue passes THB 1.8 million.
- Tax point: VAT is triggered when payment is received, or when the tax invoice is issued — whichever comes first.
- Watch out: An advance deposit also triggers a tax invoice the moment the money arrives.
2. Withholding tax
Hotels routinely incur costs that require withholding at source, for example:
- Cleaning services — withhold 3%
- Repairs and maintenance — withhold 3%
- Space rental — withhold 5%
3. Land and building tax
A property used commercially as accommodation is taxed at the commercial rate, not the residential rate. Owners who registered the building as a residence but operate it as a guesthouse are frequently reassessed later, with penalties.
- Check that the registered use of the building matches how it is actually used.
- Keep the annual assessment notice from the local authority — it is the evidence you will need if the rate is ever disputed.
4. Signage tax
Any sign showing the hotel name or logo is subject to signage tax, charged by size and by the language shown. A sign in Thai only is taxed at a lower rate than one combining Thai and a foreign language, so the design of the sign has a direct cost consequence.
5. Revenue booked through OTA platforms
Bookings through Agoda, Booking.com or Traveloka arrive net of commission. The full booking value must still be recorded as revenue, with the platform commission recorded separately as a selling expense. Recording only the net amount received understates revenue and is one of the most common reasons hotels are reassessed.
CFO Insight: Keeping purchase invoices and tax invoices organised month by month reduces financial leakage and is the most effective protection against a retrospective tax assessment.
Want the same structure applied to your property? Talk to our team about hotel and resort accounting, or read more in our accounting and tax resources.