All legal entities, partnerships, foreign company branches, and joint ventures in Thailand are required to prepare financial statements for each accounting period. For the best information and support on Annual Audit in Thailand, read through this article carefully.
With the exception of a registered partnership under Thai law, whose total capital, assets, and revenue are not higher than that prescribed in Ministerial Regulations, the financial statements must be audited by and subjected to the opinion of a Certified Thai Auditor. The performance record needs confirmation from the company’s auditor, approval of shareholders, and filing with the Ministry of Commerce’s Commercial Registration Department and the Ministry of Finance’s Revenue Department.
The Audit and Compliances in Thailand
- Thailand has a self-assessment tax system, with the tax year usually concluding on December 31.
- Financial statements for foreign enterprises (ROs, branch offices, and regional offices) must be submitted within 150 days of the fiscal year’s end.
- An independent certified auditor must analyze and certify all financial accounts.
All Thai companies, partnerships, joint ventures, and foreign company branches must submit financial statements to the Ministry of Commerce for their allocated accounting period.
Financial statements for foreign enterprises must be submitted within 150 days of the fiscal year’s end. However, in case of Foreign Businesses, it includes Representative Offices, Branch Offices, and Regional Offices. Once an accounting period has been selected, it cannot be modified without prior permission from the Revenue Department.
Note that, Thailand has a number of regulations that govern auditing and compliance. These are the following:
- The Accounting Act of 2000;
- The Securities and Exchange Act of 1992;
- The Bank of Thailand Act B.E. 2485;
- Insurance Commission Act B.E. 2550; and
- Financial Institutions Business Act B.E. 2551.
Annual General Meetings (AGM)
Companies and partnerships must hold annual general meetings in accordance with Thai Civil and Commercial Code regulations (AGM).
Within four months of the fiscal year’s end, the board of directors must issue a letter calling for the AGM. Additionally, it is mandatory to hold AGM at least once a year. However, the following items should be on the agenda for the AGM:
- To clarify the minutes of the AGM for the previous AGM;
- Approval of the director’s report on the company’s business activities;
- Acknowledge the company’s operational results from the previous year;
- Select new directors to replace those that have been terminated;
- Appoint an auditor and determination of audit fees; and
- To consider dividends.
Annual Reports for Audit in Thailand
At the end of each accounting period, limited companies, both public and private, should present the following documents:
- Company Name;
- Type of Business;
- Details of Directors;
- Audited Financial Statement;
- Balance Sheet;
- Profit and Loss Accounts;
- List of Shareholders, as of the date of the meeting; and
- Minutes of the Annual Meeting.
Companies must prepare their documentation in Thai for reporting purposes. Although, international companies cannot draft documents in any language other than Thai, yet, they must include a translation.
Private and Public Limited Companies must have their financial accounts examined by an independent auditor at the end of the fiscal year.
It is mandatory for businesses to keep their books of accounts for at least five years under the Accounting Act of 2000. Furthermore, depending on the business activity, the Director-General of the Revenue Department may extend it for another seven years.
Preparation and Filing for Annual Audit in Thailand
The preparation and filing of reporting requirements differ depending on the type of corporate entity chosen, for example:
For Private Limited Company
The company director is responsible for calling an annual meeting of shareholders within four months of the fiscal year’s end. Note that, this is for the following reasons:
- To approve the company’s audited financial statements,
- Filing the audited statement and supporting documents, including a list of shareholders on the meeting date, with the Registrar no later than one month after the meeting date.
For Public Limited Company
The company director is in charge of calling an annual meeting of shareholders to approve the firm’s audited financial accounts within four months of the fiscal year’s end. Additionally, a copy of the audited financial statement and annual report, a copy of the minutes of the shareholder meeting approving the financial statement, certified by the director, and submitted to the Registrar with a list of shareholders on the date of the meeting no later than one month after the meeting’s approval.
Furthermore, within one month of the day of its authorization at the shareholder’s meeting, the corporation must also publish the balance sheet for public knowledge in a newspaper for at least one day.
For Branch Office, Representative Office or Regional Office
The Branch Office manager must provide a copy of the financial statement to the Registrar within 150 days of the fiscal year’s conclusion. However, the shareholder meeting’s permission is not necessary in this situation.
Penalties for Non-Compliance
Anyone who breaches the compliance regulations have to pay a penalty of up to 100,000 baht (US$3,200).
A company has to pay a charge of 20% on understating its profits for a full year by more than 25%. Additionally, a 100% surcharge for improper filing and a 200% surcharge for failing to file a return. However, if the taxpayer presents a formal request to the tax officer, there can be relaxations in the penalty of up to 50%.
It is important to have an expert and professional accountant to guarantee the preparation and delivery of your reporting needs correctly within the deadline. Therefore, for accounting, tax, and auditing services, contact Konrad Legal Company Limited’s English-speaking accountants. Email us to [email protected] to get the best solution for the Annual Audit of your company in Thailand.
