It is usually paid by partnerships and limited companies carrying on business in Thailand or earning income from activities in Thailand. The entities include the Thai company, a foreign company with a permanent establishment, and a foreign company without a permanent establishment.
So, what does a permanent establishment entail?
It includes an office, branch, or any other business that has an agent, go-between for conducting business in Thailand, an agent.
If you are still not sure whether your business should pay a corporate tax, you can speak to an agent who will not only tell you your eligibility but also will help you to file corporate income tax in Thailand (CIT).
Even though there are professionals who will get these things done, you must know what is to be included during the calculations. Listed below are the expenses that are allowed and vice versa;
Allowable expenses
- Ordinary and necessary expenses;
- Interest expense;
- Depreciation (specific depreciation rates and initial allowances apply);
- Donations of up to 2% of net profits;
- 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
Expenses not allowed
- 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;
