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.

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

20 January 2021

 

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 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:

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 is not more than 30m Baht per year)

Net profit:

Not exceeding 0.3m Baht

Exempt

 

Between 0.3m Baht and 3m Baht

15%

 

Over 3m Baht

20%

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. International Business Center (*)

Net profit

3%, 5%, 8% (**)

7. Board of Investment promoted company (*)

Net profit

0%

8. Companies with a place of business in SEZs

Net profit

0%

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:

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 2017 submit on or before 30 May 2018

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 2018 submit on or before 31 August 2018

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 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.

Further sources of information

Please visit the Revenue Department website.