Thailand continues to develop and prosper as a Southeast Asian country with a significant economic impact. Future economic growth and development will be contingent on the most efficient use of resources. Additionally, it is also dependent on company planning and decisions on the basis of information one receives from Thailand’s accounting professionals. There are various reasons as why you must research for appropriate accounting services in Thailand for your business.
Investing in Thailand’s competitive market is somewhat difficult due to the country’s complex tax and accounting regulations. Moreover, these norms differ from international standards and are subject to frequent changes and updates. Dealing with Thailand’s financial regulations can be difficult and cumbersome if you don’t have a partner at your side to help and guide you.
To comply with Generally Accepted Accounting Principles and Thai rules, it is necessary that a Thai firm manages foreign business accounting matters. Konrad Legal provides you with the ideal solution for managing your Thai business’s finances, with a focus on your success.
We specialize in supporting foreign enterprises in Thailand. Our consistent focus is on translating and understanding Thai business processes for international clients. On our team, we have licensed accountants, auditors, and experienced and devoted bookkeepers. We can provide accounting services and papers in both English and Thai, as shown below.
Monthly Financial Reports (Balance Sheets, P&L)
Income
Any income arising from rendering of services or products has the recognition as income by a company or partnership firm in Thailand. It is applicable in case of non-receipt of cash as well. There are various regulations of accrued income or monthly accrual basis of expenses. The money should be deposited in a bank account for selling and receiving control. To maitain all these in a hassle-free way, one must takes services of accounting services in Thailand.
Expenses
Any expenses incurred but not yet paid should be recorded as expenses by a juridical business or partnership. This is according to the regulation of accrued expenses or monthly accrual basis of expenses.
To illustrate the true situation of the financial statement, the expenses must relate to the business. Supporting papers to prove the expenses is mandatory to establish that the firm/partnership is the payer.
Payment of the expenses must be in full with proper receipts. If the recipient is unable to give a receipt, the business or partnership should provide a receipt form for the recipient to complete and sign.
Some expenses are not applicable in tax computation. We call these “Un-deductible Expenses”. But according to the principles of accounting, there must be records to show the correct status of the financial statement. Below are some examples of un-deductible expenses:
- Ministerial regulations do not cover entertainment expenses. Even if they cover, they have to be more than 0.3% of the total income or the paid-in capital, whichever is larger.
- Tax penalty or penalty for a criminal case.
- Expenses without proof of who is the recipient or expenses that do not have any financial evidence.
- Expenses that do not involve business process
- Unreasonable high expenses, etc.
Annual Financial Statement
Accounting Period
A new company or partnership should conclude its books within 12 months after its incorporation. The closing of accounts is mandatory every 12 months after that. The performance record must have certification of the company auditor and approval of shareholders. Additionally, the company must file it with the Ministry of Commerce’s Business Development Office within five months of the fiscal year’s end. Alongwith, the filing is mandatory with the Ministry of Finance’s Revenue Department within 150 days of the fiscal year’s end. The corporation must acquire clearance in writing from the Director-General of the Revenue Department if it desires to change its accounting period.
Accounting Principles
In general, basic accounting principles of the United States, as well as the legal accounting procedures and conventions, are acceptable in Thailand. Thailand’s Institute of Certified Accountants and Auditors is the governing body that promotes the use of generally accepted accounting standards. A company must follow a single accounting consistently, and can change only with the Revenue Department’s permission.
Notable Accounting Practices
Depreciation
The Revenue Code permits the use of varying depreciation rates according to the nature of the classes of assets. These assets must have the effect of depreciating the assets over periods that may be shorter than their useful lifespan estimation. These maximum depreciation rates are not mandatory. A company may use lower rates that approximate the useful lives of the assets. But use of a lower rate in the books of the accounts, must compliment with the income tax return.
Accounting for Pension Plans
Contributions to a pension or provident fund are not deductible for tax purposes. However, these are possible only if these are actual payments to the employees, or the fund approval of the Revenue Department under the surveillance of fund manager with legal authority.
Consolidation
Local companies with either foreign or local subsidiaries may not consolidate their financial statements for tax and other government reporting purposes. However, listed companies must submit consolidated financial statements to the Securities and Exchange Commission of Thailand.
Statutory Reserve
A statutory reserve is of at least five percent of the annual net profits arising from the business. It must have company proportion approval at each distribution of dividends until the reserve reaches at least 10 percent of the company’s authorized capital.
Stock Dividends
Stock dividends are taxable as ordinary dividends and may be declared only if there is an approved increase in authorized capital. The law requires the authorized capital to be subscribed in full by the shareholders.
Book of Accounts and Statutory Records
Rules in maintaining the book of accounts ( Section 12, Accounts Act of 2000)
In keeping accounts, the person with a duty to keep accounts must hand over the documents required for making accounting entries to the bookkeeper, correctly and completely, in order that the accounts so kept may show the results of operations, financial position or changes of financial position according to facts and accounting standards. Accounting entries may be recorded in a foreign language, but there should be an appended Thai translation. Moreover, the speciality of our accounting services in Thailand is that all accounting entries should be written in ink, typewritten, or printed.
Bookkeeping Activities
Our day-to-day bookkeeping activities merely consist of :
- Posting or recording transactions in journals and on computer files and updating the files when needed.
- Review computer printouts against regularly maintained journals and make necessary corrections.
- Review invoices and statements to ensure that all the information appearing on them is accurate and complete,
- Compare computer reports with actual reports
- Verify records of transactions posted by other staff by checking figures, postings, and documents to ensure that they are correct, mathematically accurate, and properly coded.
We also use specialized accounting software, spreadsheets, and databases to make our bookkeeping services more convenient for our clients. This makes us save more time and to do additional responsibilities and services, such as payroll, procurement, and billing. Many of these responsibilities need writing and sending letters, email and fax messages and making phone calls to clients.
Some of our major accounting functions and your benefits includes:
- For in-house accounting, our professional accounting team is very glad to teach/train, review and join with your inside meeting and teach your staff how to do by themselves all the possible ways to achieve competitive business growth.
- We provide satisfactory services, thus, allowing you to focus on your business activities and objectives without interruptions.
- Our monthly or quarterly financial report makes you understand the financial status of your business.
- Our payroll services help your payroll function effective and efficient.
- You only pay the necessary tax you have to pay.
- Our team can help you do business planning for your success.
The Bottomline
Our accounting services in Thailand strictly follows the Accounting Act of B.E 2000. The Accounting Act provides the basic requirements relating to financial reporting by all business entities incorporated in Thailand. It requires that registered partnerships, limited companies, public limited companies established under Thai Law, and joint ventures and foreign entities operating in Thailand under the Revenue Code have a duty to maintain books of accounts. According to the rules prescribed under the Accounting Act; such accounts must be kept for a period of at least 5 years after the accounting period. The rules prescribe that Thai Accounting Standards (TAS) are mandatory for accounting and financial reporting by all business entities. The Ministry of Commerce, Bureau of Business Supervision of the Department of Business Development, is responsible for administering and implementing the accounting act.
For best accounting, bookkeeping, and auditing services in Thailand, email us at [email protected].
