Proposed Reduction in Corporate Income Tax Rates
The Cabinet has announced a reduction in corporate income tax rates, with the aim of improving the competitiveness of Thailand on the global market.
Keywords: Tax, Thailand, Corporate Income Tax, Tax Reduction
Corporate income tax rates will be reduced from 30% to:
- 23% for accounting periods commencing on or after 1 January 2012; and
- 20% for accounting periods commencing on or after 1 January 2013.
For companies listed on the Stock Exchange of Thailand (‘SET’), the income tax rate will be reduced from 25% to 23% and 20% respectively for the prescribed periods outlined above. For Small and Medium Enterprises (‘SMEs’) and companies listed on the Market for Alternative Investment (‘MAI’), the tax rate shall be as follows:
Tax payer | Net taxable Income (Baht) | Tax rate | Effective Date |
SME* | Not exceeding 150,000 | Exempted | Accounting period commencing on or after 1 January 2012 |
150,000-1,000,000 | 15% | Accounting period commencing on or after 1 January 2012 | |
Over 1,000,000 | 23% | Accounting period commencing on or after 1 January 2012 | |
Over 1,000,000 | 20% | Accounting periods commencing or on after 1 January 2013 | |
Company listed on the MAI (excluding companies entitled to the 20% tax rate) | Not exceeding 50,000,000 | 25% | 2011 accounting period |
All income | 23% | Accounting period commencing on or after 1 January 2012 | |
All income | 20% | Accounting periods commencing on or after 1 January 2013 |
SME* is a company or partnership which has:
- paid-up capital at the end of accounting period of not more than Baht 5 million; and
- total revenue from sales of goods and rendering of services is not more than Baht 30 million.
The proposed tax reduction was already subject to much discussion within the business community. However, as a result of the recent severe flooding, the Thai government’s budget will be considerably stretched to fund flood recovery programs. As a result it is expected that the reduction may be shelved or delayed until a more appropriate time.
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