Corporate Income Tax in Thailand - Mazars - Thailand
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.
| 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:
|
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 the income is paid although certain types of income will be exempted under Double Taxation Agreements.
Tax calculation
The 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 gross receipts or paid up capital as at the closing date of the accounting period, whichever is greater 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;
- Criminal fines and tax penalties and surcharges;
- 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 clearly stated in the agreement with the supplier.
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
A temporary corporate income tax rate reduction has been introduced for three accounting periods commencing on or after 1 January 2012.
Some relevant corporate income tax rates:
| Taxpayer | Tax base | Rate |
| 1. Companies not mentioned below | Net profit | 23% (†) |
| Net profit | 20% (‡) | |
| Net profit | 30% (**) | |
| 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) | Net profit not exceeding 0.15m Baht | Exempt |
| Net profit over 0.15m Baht but not exceeding 1m Baht | 15% | |
| Net profit exceeding 1m Baht | 23% (†) | |
| Net profit exceeding 1m Baht | 20% (‡) | |
| Net profit over 1m Baht but not exceeding 3m Baht | 25% (**) | |
| Net profit exceeding 3m Baht | 30% (**) | |
| 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 profit out of Thailand | Amount remitted | 10% |
| 6. Regional Operating Headquarters (*) | Net profit | 10% |
| 7. Board of Investment promoted company (*) | Net profit | 0% |
Notes:
(*) Specific conditions apply
(**) Rate before the temporary reductions
(†) Accounting period commencing on or after 1 January 2012
(‡) Two accounting periods commencing on or after 1 January 2013
Forms and submission
For limited companies and partnerships carrying on business in Thailand, forms and submission requirements are:
| Form | Submission deadline |
| PND 50 Annual tax return | Within 150 days from the last day of the accounting period e.g. for year ended 31 December 2011 submit within 29 May 2012 |
| 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 2012 submit within 31 August 2012 |
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.
Late submission
The fine for late submission of the annual or half year tax return is 2,000 Baht. 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 should have been paid.
Further sources of information
Revenue Department website: http://www.rd.go.th/publish/6044.0.html
Contacts
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