Companies subject to Corporate Income Tax (CIT) on net earnings must make tax prepayment. This prepayment is in the form of a half-year report in addition to the annual tax payment. This is applicable for businesses who are not making any profits. Read through this article to know more about the Half Yearly Tax Filing in Thailand.
Evolution of Half Yearly Tax Filing in Thailand
On 10 September 2015, an additional provision for Thailand half-year CIT return filings was permitted by the Thai Revenue Dept.
The basis of payment of half-year corporate tax is prescribed in Section 67 bis of the Revenue Code. Details are as follows:
- For listed companies, banks and financial institutions, half-year tax shall be based on the amount of the actual net profit for the half-year.
- For other corporate entities, half-year tax shall be based on an estimated amount of net profit for the entire year.
The rules are slightly different for corporate entities. It is on the basis of the half-year tax on an estimated net profit for the entire year. Furthermore, Section 67 of the Revenue Code prescribes a statutory warning for corporate tax payers. It is for cases when the estimate is lower than the actual net profit by more than 25%. In such cases, the corporate entity shall be subject to a penalty of 20% of the shortfall of the tax.
There is one facts-of-life in Thailand. It is that no reasonable excuse being totally honest and legitimate can fool a tax officer in Thailand. You can never make them to believe you and cheat tax. The easiest and safest way to have a reasonable excuse is to follow the Director-General’s Instruction No Paw 50. This orders the tax audit officers to allow the following as reasonable excuses:
1. When a corporate entity prepares an estimated net profit and files a half-year tax return with a payment of half-year tax that is not less than one half of the tax liability amount in the previous full year’s tax return; and
2. When a corporate entity prepares an estimated net profit and files a half-year tax return with an estimated net profit that is not less than the net profit in the previous full year’s tax return and a payment of half-year tax is less than half of the tax liability amount in the previous full year’s tax return because of an entitlement to a tax exemption or a tax rate reduction.
Half Yearly Tax Filing Compliance
A business must estimate its annual net profit as well as its tax due and pay half of the expected tax amount within two months of the end of its accounting period. The prepaid tax can be credited to the annual tax liability.
For example, if a company’s accounting period closes at the end of the calendar year – December 31 – the first six months are January through June. A company must submit half-year report within two months of the end of June, i.e. by the end of August.
If a company tries to pay less half-year tax by forecasting lower annual profit or simply underestimating its earnings, and the actual year-end profitability turns out to be 25% higher than the forecast, the company will have to pay an additional 20% tax on the difference between the forecast and the actual tax.
When a corporation publishes a half-year report on a projected amount of net profit that is larger than or equal to one half of its actual net profit from the previous accounting year, this rule is reasonable (as filed in the corporate income tax return). As a result, if this is true and the company undervalues its earnings above the permissible range, this will still be a prudent approach.
Konrad Legal Company Limited may prepare and submit your company’s half-year report, as well as your tax payments, on your behalf.
Deadline of Half Yearly Tax Filing in Thailand
The deadline for Mid-year corporate income tax return filing is May 31, 2022. You have to do so by completely filing the Por Ngor Dor 51 or PND 51 form.
A limited company with an accounting period commencing October 1, 2021, must file the return and pay one-half of any tax due on the estimated annual profit, or the tax due on the actual first 6 months profit, as the case may be, to the District Office.
Deadline for Internet Filing of the same is June 8, 2022. Book a round of Free Online Consultation with our Taxation Specialists. Alternatively, you can leave us an email at [email protected].
