This Percentage of Tax You May have to Pay If You are a Foreign Business Owner in Thailand!
Do you have a Thai company registered under the Thai law or is it a foreign company doing business in Thailand and registered under foreign law? Or a foreign business that though not carrying business in Thailand, deriving income from the kingdom?
Well, business identities can be many and so will it affect your tax rates and benefits. Let’s say it is a Thai company;
Such a company pays tax at 20% of net profit through some companies are entitled to get a rate reduction such as;
• A small business with a paid-up capital of lesser than 5 million baht has to pay;
“20% of net profit > 1million baht, 15% of net profit between 300,000 – 1 million baht, Exempt net profit < 300,000 baht”
• Companies that are registered in the SET i.e., Stock Exchange of Thailand
“20% of net profit < 300 million baht for 5 consecutive accounting periods starting from 6th September B.E.2545”
• A recently registered company in the Stock Exchange of Thailand (SET) and Market for Alternative Investment (MAI) in three years beginning from 6th September B.E.2545
20% of net profit for the recently registered company in SET and MAI for 5 consecutive accounting periods
• International Banking Facility in Bangkok and Regional Operating Headquarters
10% net profit from the qualified income
• Association and foundation
2% or 10% of the gross receipts
And in case of a foreign company
A foreign company doing business in the kingdom, whether it has an employee or agent or a branch or an office shall pay 30% of the tax on the profit from the business. However, an international transportation company is to pay tax at the rate of 3% on the gross receipts.
On the other hand, a foreign company overseas that doesn’t do business in Thailand but derives income from Thailand will be subjected to the withholding tax; of course on certain categories. Nevertheless, the withholding tax rates can be reduced or even exempted further based on the types of income under the Double Taxation Agreement provision. As for rates, it is somewhere, 10% remittance of profits, dividends 10% and other income like capital gains, professional fees 15% and rents.
However, in order to pay the taxes, you must apply for a tax identification number that should be derived from the Revenue Department. Lor Por 10.3, an application form needs to be submitted along with documents such as company’s registration license and house registration copy, etc; to the Area Revenue Office within sixty days for the operation date.
