Corporate Income Tax in Thailand

Keywords: Mazars, Thailand, Tax, Corporate income tax, Revenue Department

20 January 2021

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 for public interest or charity of up to 2% of net profit;
• Donations for education or athletics of up to 2% of net profit;
• 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:

• Private expenses or gifts;
• 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

Relevant corporate income tax rates:

Notes:

(*)   Specific conditions apply

(**) Depending on annual operating expenses locally paid, as follows.

• 3% when annual operating expenditure is between 60 – 300 million baht
• 5% when annual operating expenditure is between 300 – 600 million baht
• 8% when annual operating expenditure is 600 million baht or more

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 2024.

Surcharge for late submission

There is 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.