BOI-promoted companies: same VAT refund process, three things that differ

01The process itself is the same

Whether a company claims a refund through the monthly return or files a separate claim, promoted and ordinary companies use the same form and the same rules. A company wanting faster payment can apply for Good Exporter status to access the accelerated track — but that status is assessed on paid-up capital and export ratio, not on whether the company holds a promotion certificate. A company with no promotion status but a high enough export ratio can qualify; a promoted company that doesn't meet the threshold does not get fast-tracked either.

02Duty-free import does not mean VAT-free

This is the easiest thing for a promoted company to misread. Promotion relieves import duty on machinery and materials, and the import VAT that would otherwise apply at the same point is relieved alongside it — but that relief covers only the import leg. Once the machinery and materials are on site, VAT on local purchases — services, local components, utilities — is due the same way it is for any other company, and just as recoverable. Read "duty-free on import" as "VAT-free across the board" and the local input VAT that could have been claimed back sits unclaimed, year after year.

03Why the credit balance tends to run larger

Export sales are zero-rated, so output VAT is close to nil regardless of promotion status. For a promoted company, the import side produces little or no input VAT either, because the imports are duty- and VAT-exempt — which leaves local purchases as the only source of input tax. Put those together and a promoted exporter's business structure tends to accumulate a larger credit balance than a comparable company selling domestically. That is a feature of the business model, not a sign the books are wrong — and it is worth sizing before assuming your numbers should look like an ordinary company's.

04One more thing to reconcile: monitoring data

A project with duty-free machinery or material imports carries an additional compliance obligation: reporting usage against the approved list under BOI's monitoring requirements. That reporting and the import VAT data filed with the Revenue Department are supposed to agree. When they don't, the refund review tends to raise extra rounds of questions — a check that ordinary companies never have to deal with. Reconciling the two before filing, rather than waiting to be asked, is worth doing as a matter of course.

All three points come down to the same thing: a promoted company is not on a different track, but it does carry a few extra things worth clearing up before it files. Back to the general VAT refund mechanics.