Corporate Income Tax in Thailand

Corporate income tax is paid by limited companies and partnerships conducting business in Thailand or deriving income from activities in Thailand.

17 May 2017

Entity Taxable profits
Thai company Worldwide net profit
Foreign company (with a Permanent Establishment (*) (‘PE’) in Thailand) Net profit from business carried on in Thailand
Foreign company (no PE in Thailand)

Income from Thailand (**)

For example:

  • Service fees
  • Dividends
  • Rent
  • Interest

Notes:

(*) 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.

Tax calculation

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.

Rates

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:

Taxpayer Tax base Rate 
1.  Companies not mentioned below Net profit 20% 
2.  Small company (paid-up capital does not exceed 5m Baht at the end of each accounting period and total revenue from sales of goods and rendering of services of is not more than 30m Baht per year) Net profit not exceeding 0.3m Baht Exempt (‡)
    Net profit exceeding 0.3m Baht 10% (‡)
3.  Foreign company not carrying on business in Thailand receiving dividends from Thailand Gross receipts 10%
4.  Foreign company not carrying on business in Thailand receiving other types of income apart from dividend from Thailand Gross receipts 15%
5.  Foreign company remitting profits out of Thailand Amount remitted 10%
6.  Regional Operating Headquarters, International Headquarters or International Trading Center (*) Net profit Exempt or 10%
7.  Board of Investment promoted company (*) Net profit 0%

Notes:

(*) 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:

Form Submission deadline Fine for late submission
Within 7 days After 7 days
PND 50  Annual tax return

Within 150 days from the last day of the accounting period

e.g. for year ended 31 December 2016 submit on or before 30 May 2017

2,000 baht 4,000 baht
PND 51  Half year tax return

Within 2 months from the last day of the first 6 months of the accounting period

e.g. for year ending 31 December 2017 submit on or before 31 August 2017

1,000 baht 2,000 baht

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.

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