17 May 2017
(*) Permanent Establishment includes an office, branch or any other place of business in Thailand or has an employee, agent, representative or go-between for carrying on business in Thailand.
(**) Collected through withholding tax deductions when income is paid although certain types of income are exempted under Double Taxation Agreements.
Taxable profit is derived from the sum of all revenue less allowable expenditure in the accounting period.
The following expenses are allowable:
- Ordinary and necessary expenses;
- Interest expense;
- Donations of up to 2% of net profits;
- Entertainment expenses up to 0.3% of the higher of gross receipts or paid up capital at the end of accounting period but not exceeding 10 million baht; and
- Depreciation (specific depreciation rates and initial allowances apply).
As a general rule, the Revenue Department (Section 65 Ter) does not allow the following as an allowable expense:
- Expenses without sufficient supporting documentation (Revenue Department has specific requirements);
- Expenses where the recipient cannot be identified;
- Penalties, surcharges, and criminal fines imposed by any tax law;
- Reserves (specific exceptions do exist);
- Expenditure incurred relating to a prior period which had not been accrued as at the end of that period; and
- Withholding tax paid absorbed on behalf of the supplier unless agreed in writing.
Specific rules apply to the tax on dividend income.
Losses carried forward from the last five accounting periods are offset against the taxable profit.
The temporary corporate income tax rate reduction has been permanently extended from 1st January 2016 onwards.
Small and medium enterprises (SMEs) can benefit from a reduced corporate income tax rate, commencing on or after 1st January 2015 and for two consecutive periods.
Relevant corporate income tax rates:
(*) Specific conditions apply
(‡) Two accounting periods commencing on or after 1 January 2015
Forms and submission
For limited companies and partnerships carrying on business in Thailand, forms and submission requirements are:
Half year tax is a prepayment calculated from the tax payable on the forecast net profit for the year. The prepaid tax is creditable against the full year tax liability.
The Revenue Department has announced that companies registered for e-filing have an extra eight days to file the CIT returns after the normal deadline. This incentive will run until 31 January 2019.
Surcharge for late submission
There is also a surcharge of 1.5 percent of the tax payable per month for late submission of the annual tax return.
Underpayment of half year tax can result in a surcharge of 20 percent of the tax that has been underpaid.
Further sources of information
Please visit the Revenue Department website.