Corporate and other Taxes
Corporate income tax is paid by limited companies and partnerships conducting business in Thailand or deriving income from activities in Thailand.
All companies, registered partnerships, juristic persons doing business in Thailand, public limited companies and joint ventures. in Thailand have to prepare and keep accounts. A private person is exempted from this. The accounts have to be in accordance with Thai Accounting Standards, and should show a correct image of the company’s expenses and assets.
An incorporated company should close its accounting year every 12 months (per December 31 or another date). The balance sheet — an overview of the assets and liabilities — and the profit and loss accounts have to be prepared and filed at the end of each period. The accounting year can be changed with approval from the Revenue Department.
The financial statements also have to be examined and certified by a licensed accountant (regardless of whether the company has traded or not). Within four months after the closing of the accounting year, the fully signed off accounts should be approved by the Annual Shareholders’ Meeting. Upon approval, the financial statements have to be submitted to the Revenue Department and the Commercial Registrar within one month.
The accounts and other relevant company documents have to be kept at the company’s registered address for at least five years.
CORPORATE INCOME TAX (CIT)
All companies are required to register for a Taxpayer Identification Number (TIN) within 60 days after incorporation.
|Standard corporate income tax rate|
|As from January 1, 2013||20%|
Corporate income tax rates for companies (Paid up capital of not more than 5M THB and sales and services income less than 30M THB):
|Net profit||Tax rate|
|0 – 300,000 THB||Exempted|
|300,001 – 1,000,000 THB||15%|
|1,000,001 THB and above||20%|
Half Year Report
In addition to the annual tax payment, any company subject to CIT is required to make a half year tax prepayment. A company is obliged to estimate its annual net profit as well as its tax liability and pay half of the estimated tax within eight months after the beginning of the accounting period. The prepaid tax is credited against its annual tax liability.
There are penalties due in some circumstances where the estimated half yearly tax is substantially less than the actual annual tax due.
VAT – VALUE ADDED TAX ACCOUNTING
A company is obliged to register for VAT in three cases:
- The activities that the company will conduct are VAT subjected (e.g. export of goods)
- The turnover of the company is more than 1,800,000 THB per year. The company has to apply for a VAT number within 30 days after the company reached this amount of sales
- The company will employ a foreigner and will thus have to apply for a work permit.
The VAT is at present 7% with exemptions in the following areas:
- Export of goods
- Services rendered in Thailand, but used abroad
- Sale of goods and services to the authorities, state enterprise or UN organisation under a foreign loan or assistance project
- International transport services
- Sale of goods and services between bonded warehouses
- Sale of goods within customs free zones
- Domestic transport
- Rent of immovable property
- Sale of agricultural products.
- Sale of newspapers, magazines and textbooks
- Healthcare, cultural and educational services.
There are several other taxes you are likely to need to comply and be responsible for as part of doing business in Thailand. These include:
- Personal Income Tax
- Property Taxes
- Landlords extra income tax on leased properties
- Local government taxes
- Alcohol and associated taxes
- Withholding tax
- Sign tax
Let us at Expat Gold help guide through this minefield.
Our services include:
- Value Added Tax
- Monthly reports (P&L statements, Balance Sheets)
- Withholding Tax
- Withholding Tax Return
- Annual Tax Returns
- Sign and Local Government Taxes
- Alcohol & related Taxes
- Property Taxes, other Taxes and Insurance
Wading through the quagmire of tax laws and compliance can be complicated. However, we can take the stress out and make it easy for you so you can spend your valuable time and effort concentrating on the operation of the business.