: You are allowed to deduct gifts and donations up to 4% of net profit ie.:
– 2% to approved public charities or public benefit;
– 2% to approved education or sports bodies.
No deduction is permitted for expenditure that is net profit (e.g. bonuses paid as a
% of net profit) at the end of the accounting period. Entertainment & representation expenses are deductible up to
limit as gross sales %, or of paid-up capital at the accounting period closing date, whichever is greater.
Depreciation of assets of limited companies and partnerships is based on cost.
Annual depreciation rates permitted by law vary from
Taxes are due on a semi-annual basis within 150 days of the
close of a six-month accounting period, and employers are
required to withhold personal income tax from their employees.
Traders must keep records of all gross receipts and file monthly business
tax returns and pay business tax bby the 15th day of the following month
regardless they have had any gross receipts that month. You must file audited financial statements every 12 months. Small to
medium Thai Companies may pay around 7500 baht for this. A corporate taxpayer
files half-year returns and pays 50%
of estimated annual income tax at the end of the 8th accounting period month. Failure to pay
or underpay by more than 25% you will be fined up to 20% of the
deficit amount. Failure to file a tax return, late filing or filing a return containing false or inadequate information
you receive penalties. Failure to file a return, and subsequent non-compliance
order's to pay tax assessed, can be a penalty
up to twice the amount of tax due. Penalties must be also
within 30 days of assessment.
Payable on most documents at varying rates.
This is levied on certain types of products
like fruit juice, alcoholic beverages, cigarettes, tobacco, cinemas,
Owners of land and/or buildings may have to pay annual taxes levied by the local government. Under
the Local Development Tax Act of 1965, rates per unit vary according to the appraised value of the land. However, land
personal use, animal husbandry, or land cultivation is exempt. Land taxed under the House and Land Tax Act of 1932,
is based on the value of the land and buildings or any other improvements,
& an annual tax is levied at the rate of 12.5% of the assessed assumed rental value of the
property. Owner-occupied residences are exempt. Property Tax. There is a transfer fee of 3% of the assessed value of real estate transferred.
Normal Tax Year End Individuals - 31 December, Companies - Any consecutive 12 months.
Companies with ten or more employees, the government, and employees are all required to contribute 1.5% of each employee's salary (up to Bht 225 per employee per month) to a social security fund.
Capital gains tax is treated as ordinary taxable income.
Taxes may be paid on-line.You will be able to make electronic payments (e-payments) for all
categories of taxes, including income tax, following the department's launch of VAT payments, its first online
service. Paying taxes online, you must apply for the service at http://www.rd.go.th
. The Revenue Department will then ask to check a taxpayer's identity in person before they receive a user ID and password.
But you must have an account with one of three commercial banks - Krung Thai Bank, Siam Commercial Bank or Bank of
Asia.Later the service will be extended to those with accounts with Thai Farmers Bank, Citibank and Bangkok Bank.
A lack of basic computer skills of the taxpayer rather than lack of confidence in e-transaction security
were reasons why this isn't popular. The Revenue Department now provides an electronic manual with step-by-step procedures.
In May, some 135 companies had registered to use the service, but only 43 submitted all the requested information.
24 companies had made e-payment transactions, with the value of e-tax payments being
approx Baht 300,000.-In June, 128 companies had applied for the service,
& 1 company conducting a transaction this month so far.Corporate taxpayers are also encouraged to use the online VAT payment system.
If companies paid VAT on-line and were eligible for a VAT refund, they would receive it within 30
days, compared to 60 days.
Failure to file a return, and subsequent
non-compliance with an order to pay the tax assessed, may result in a
penalty equal to twice the amount of tax due. Penalties are due within 30
days of assessment.
Staff and management
INCENTIVES FOR LISTED COMPANIES:
The Royal Decree No. 387 became law on 6 September 2001 to
reduce corporate income tax rate for listed companies from 30% to
to 25% Existing listed companies
Baht 0-300 million on net profits pay 25%; Baht 301 million
or more 30%.A newly listed
companies on the MAI (Market for Alternative Investment),
the newly trade board by the SET. 20%. New listed companies on the SET
pay 25% on net profits.
The reduction rate is applied to only 5 accounting periods, for
existing listed companies: starting from the accounting
period on or after 6 September 2001. But, 5 accounting
periods for new listings registered on both the SET and the MAI
will be counted from the accounting period started on or after the
listing day. New listed companies must be listed within 3 years from 6
September 2001, i.e. 5 September 2004.The government issued certain conditions to close loopholes for
any companies using concession rates. This means new listed
company's will be granted the above reduced rate only when it does
not fall under the following conditions: (A) De- listing from the
SET during the period of 3 years before re- listing on the SET or
MAI. (B) A company amalgamated by another existing listed company
or acquiring businesses in whole or part from the existing listed
companies during the period of 3 years before listing on the SET
or MAI. (C) Must not be acquired in whole or part of
business of existing listed company throughout the period in which
the company is entitled to tax rate reduction. Otherwise, the
entitlement to tax reduction will be terminated, beginning from
the accounting period where the acquisition of business has
wish to thank Kuhn Ornachai for sending us the above information
& the Thai Embassy, NZ for supplying us with Business
Please ask your accountant to verify as we do not accept responsibility as
there could be changes since we received this information. This is only a
basic guide for those interested in the tax system of Thailand & parts
may not be accurate ).
The standard company tax rate in Thailand has long been 30%.
Several recent changes to the company tax rate will mean that many
companies will now pay tax as low as 10% or 20% on their profits.
We summarise the recent changes as follows:
Regional operating headquarters:
In December, the cabinet approved a number of new tax measures for
Regional Operating Headquarters (ROH) based in Thailand.Net
profits from ROH Operations including interest and royalties are
now subject to 10% Corporate Income Tax. The laws implementing the
new tax measures have not yet been issued.The new tax measures,
coupled with improvements to the existing ROH privileges, will
make Thailand more competitive with traditional regional
head-quarters locations such as Singapore, Malaysia and Hong Kong.
SME company tax rates:
Reduced company tax rates for small and medium enterprises (SME's)
became effective on Jan 31 this year. The rates for accounting
periods commencing on or after Jan 1, 2002 onward are 20% on net
profits up to one million baht, 25% on net profits of one to three
million baht, and 30% on net profits above three million baht.To
be eligible for these rates, a company must not have more than
five million baht in paid-up capital at the end of the accounting
period. The Finance Ministry expects more than 85% of companies
liable to Corporate Income Tax will be eligible for the reduced
Royal Decree No. 387 issued under the Revenue Code grants reduced
tax rates for companies listed on the Stock Exchange of Thailand
(SET), including the Market for AIternative Investment (MAl). The
reduced tax rates for listed companies are as follows:
25% for listed companies on the SET prior to Sept. 6 2001 on net
profits not exceeding 300 million Baht.
20% for companies listed on the MAl within three years from Sept
25% for companies listed on the SET other than the MAI within
three years from Sept 6, 2001.
The reduced rates will apply for five consecutive accounting
periods only. For companies listed prior to Sept 6, 2001, the
reduced rates will first apply for the accounting period beginning
on or after Sept 6, 2001. For newly listed companies, the reduced
rate will first apply for the accounting period beginning on or
after the listing date.
Conditions apply to prevent companies listed prior to Dept. 6,
2001 from taking advantage of the lower tax rates granted to newly
The reduced rates will not be conferred on companies that delist
and then relist or on newly listed companies that carry on the
business of a company listed prior to Sept. 6, 2001 due to a
business transfer or amalgamation.
Venture capital companies investing in SME’s:
The Royal Decree No. 396 issued under the Revenue Code, effective
from Jan. 31, 2002, grants corporate tax exemptions to venture
capital companies that invest in SME’s. Dividends received from
SME’s and gains arising from the transfer of shares in SME’s
are granted exemption from corporate tax.
A number of rules, procedures and conditions are prescribed in the
Royal Decree. Corporate shareholders in a venture capital company
that receives an exemption from corporate income tax are also
granted exemption from income tax on:Dividends received from the
company; and Gains arising from the transfer of shares in the
company. Bangkok Post, April 17, 2002
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