Will your business in Thailand need to pay Specific Business Tax in Thailand this month? Yes, SBT filing must be done monthly; if you miss any, you will be subjected to heavy penalties.
Therefore, without worrying about the consequences, read through our guide for complete information on SBT.
What is Specific Business Tax (SBT) in Thailand?
Specific Business Tax is a form of indirect tax that applies to businesses that are not subject to value-added tax (VAT). Businesses with an annual turnover exceeding 1.8 million Thai Baht must pay VAT. Additionally, your business must have a value-addition provision to be liable for VAT.
In 1992, the concept of “business tax” was eliminated. Instead, it was replaced by VAT and SBT or Specific Business Tax. This means, that if your business is not eligible for VAT, you need to pay SBT.
Therefore, after registering your company in Thailand, you must apply for tax registration. Corporate Income Tax registration is the mandatory one. Next, based on your business transaction volume, you should proceed with VAT or SBT registration. To ascertain this aspect, you must seek the support of a reliable accounting and tax firm in Thailand.
Nonetheless, your understanding of the aspects of SBT liability is crucial. Let us help you with some information comprehensively.
Is Your Business Eligible to Pay Specific Business Tax in Thailand?
The basic eligibility to have your tax identity as an SBT-registered business in your annual transaction volume. If your transaction volume is more than 1.8 million THB per annum, you need not worry about SBT. Then you will have to apply for VAT Registration in Thailand.
If not, you need to check the nature of your business. Please note that there are certain forms of businesses that enjoy exemption from the liability to pay SBT in Thailand. Following is the list of businesses that are liable to pay SBT:
- Banking, as defined by the law governing commercial banking or any other specific law.
- Finance, securities, and credit foncier activities, as defined by the governing law.
- Life insurance, as defined by the law governing life insurance.
- Pawnbroking, as defined by the law governing pawnshops.
- Regularly conducted business activities similar to commercial banks, such as the provision of loans, guarantees, currency exchange, issuance, purchase or sale of bills, or money transfers abroad by various means.
- Buying and selling of immovable property commercially or profitably, regardless of the acquisition method, but only by the rules, procedures, and conditions prescribed by a royal decree.
- The sale of securities on the securities market, as stipulated by the law governing the securities exchange of Thailand.
- Any other business as prescribed by a royal decree. You need to keep yourself updated on the regular updates issued by the Department of Business Development or the Thai Revenue Department to track such decrees. If you find this task to be daunting, you should hire a tax firm in Thailand.
Is the nature of your business listed above? If yes, you must go for Specific Business Tax Registration in Thailand. Check the process below.
Specific Business Tax (SBT) Registration in Thailand
Entities and individuals subject to Specific Business Tax (SBT) must register as SBT-registered entities or individuals within 30 days of starting operations. Registration should be done at the Area Revenue Office for businesses located in Bangkok or at the District Revenue Office for businesses located elsewhere.
If a taxpayer has multiple branches or offices, the registration application must be submitted to the Area or District Revenue Office where the headquarters is situated. For foreign operators, an agent designated by the operator is responsible for undertaking SBT registration on behalf of the foreign operator.
Registration Form for Specific Business Tax in Thailand
Now that you know about the tax registration process, you must also be aware of the SBT tax base and rates. This will help you plan your business finances well!
Specific Business Tax (SBT) Base and Rates in Thailand
| Type of Business | SBT Base | SBT Rates |
|---|---|---|
| Banking, finance, and similar business | – Interest, discounts, service fees, other fees, gross profits from purchase or sale of, or obtained from, negotiable instruments or other instruments of indebtedness. – Gross profits from currency exchange issue of negotiable instruments or other instruments of indebtedness or remittance of currency to foreign countries. | 3% |
| Finance, securities, and credit foncier business | – Interest, discounts, service fees, other fees, gross profits from purchase or sale of, or obtained from, negotiable instruments or other instruments of indebtedness. – Gross profits from currency exchange issue of negotiable instruments or other instruments of indebtedness or remittance of currency to foreign countries. | 3% |
| Life Insurance | Interest, Service Fees, and other Fees | 2.5% |
| Pawn Brokerage | Interest, fees, remuneration from selling overdue property | 2.5% |
| Businesses with regular transactions similar to commercial banks | – Interest, discounts, service fees, other fees, gross profits from purchase or sale of, or obtained from, negotiable instruments or other instruments of indebtedness. – Gross profits from currency exchange issue of negotiable instruments or other instruments of indebtedness or remittance of currency to foreign countries. | 3% |
| Real Estate | Gross receipts | 0.1% |
| Sale of securities in a securities market | Gross receipts | 0.1% (exempted) |
**Imposition of Local tax at the rate of 10 % on top of SBT.
Filing and Paying Specific Business Tax (SBT) in Thailand
The SBT taxable period runs from the first to the last day of each calendar month. Companies must file their SBT return (Form ภธ. 40) monthly, regardless of whether or not they have earned any income during that period.
Specific Business Tax Filing and Return Form in Thailand
You must submit the SBT return and payment to the District Revenue Office within 15 days of the following month. If a taxpayer has multiple places of business, each business must file its return and make the payment separately. However, an exception may apply if the taxpayer has obtained approval from the Director-General.
After filling up the above form, you must submit the Form ภธ. 40 and pay taxes at the following locations:
Bangkok: Branch Area Revenue Office in which the business is located
- Other locations designated by the Director-General of the Revenue Department as the place for filing and paying tax
Other provinces
- Submit the return at the Branch Area Revenue Office at the location of your business.
- Other locations that the Director-General of the Revenue Department authorizes as the place for filing and paying taxes.
Financial institutions, life insurance, and real estate are examples of businesses that are subject to specific business tax in Thailand as they are not liable to pay VAT.
If you are a foreign investor in Thailand, we recommend engaging with Konrad Legal’s tax services for extra support and guidance when filing and submitting taxes in Thailand. Simply email us your requirements at [email protected] and we will ensure that you maintain your tax compliance punctually.
