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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