Business challenges – Thai revenue department requirements

With all international travel restrictions lifted and most nationwide public-health measures relating to Covid-19 relaxed, Thailand fragile economy has started showing signs of recovery. One sector that is seeing significant growth is foreign direct investment (FDI), which increased by 32.3% quarter-on-quarter and 63.7% year-on-year in Q1 2022 to 15.9 billion Baht, according to figures from the Bank of Thailand (BoT).

While the green shoots of recovery are a very welcome sign after more than two years of stagnation, many local business are still counting the cost of the past 24 months. However, there is a silver lining as financial analysts predict a rebound in domestic consumption coupled with the uptick of international travellers; both positive bellwethers for retailers and those looking to establish a foothold in the Kingdom.

With a new business now fully incorporated in Thailand and possible sites for a store located and a retail lease agreed on, it is now time for first-time businesses to turn their attention to some of the prerequisites laid down by the Revenue Department. These include, but are not limited to, registration of point of sale (PoS) systems and signboard taxes.

After signing a retail lease and performing the necessary fit out stages of opening a store, all retail businesses must register their Point of Sale (PoS) systems with the Revenue Department by completing the Phor Phor 06 form. It is important to note that supporting documentation is required with the application and includes a summarized specification of cash registering machines, details of cash registering machines such as serial numbers, languages to be used and name of the software when issuing summary tax invoices, types of machine (e.g. electronic cash registers or computer cash registers), and types of tax invoices being issued (summary tax invoices, full tax invoices or both).

Further regulations for retail outlets include the installation of a chart displaying the layout of PoS machines in a shop; a plan and layout which shows a linkage of the cash registering machines with a computer or another piece of equipment; a sample of the summary tax invoices; a sample of a daily report of the sale of goods issued by the machines; and the operating manual of the cash registering machines being used. 

For companies that are interested in erecting outdoor signage to advertise their business, including personalized corporate names, it may be of interest to know that Thailand levies a signboard tax, which starts at 200 Baht. A signboard tax is just as it sound and covers company nameplates installed in front of a building; advertising boards at bus stops / shopping centers etc; billboards on tollways / motorways; and posters shown at train stations.

Different tax rates are applied to the size of each sign and the languages used. For instance, signboards that display only Thai words are taxed at the rate of 3 Baht per 500 square centimeters; signboards displaying both Thai and foreign words and/or pictures are taxed at 20 Baht per 500 square centimeters; signboards that display foreign words alone with a picture or logo are taxed at 40 Baht per 500 square centimeters; while signboards that display foreign words alone or have Thai words below the foreign words are taxed at 40 Baht per 500 square centimeters.

As the leaseholder of the retail space and owner of the signboard, your company must file the tax return (PP.1) within 31 March of each year and the tax must be paid within 15 days after notification of the tax assessment. In case of failure to file a tax return, there is a 10% surcharge on the signboard tax payable. Failure to pay the signboard tax carries a 2% surcharge per month on the signboard tax payable.

If any of the regulations relating to Revenue Department requirements mentioned herein come across as burdensome, confusing or inconvenient, Mazars Thailand has a multi-lingual team of retail specialists that are available to discuss your concerns.