This is What You Need to Know about Corporate Income Tax in Thailand

You must be aware of the importance of book keeping, complying with Thailand’s tax and accounting laws mentioned in the Civil and Commercial Code, Revenue Code, Accounting Act and Public Limited Company Act. If you are a foreigner having a business in Thailand, then the corporate income tax will be charged at a certain rate based upon your profit and registered capital. However, whether it is a Thai or a foreign company in Thailand, both will require submitting a mid-year tax return and annual tax return (PND 50).

PND 50 must be submitted to the Revenue Department annually. In the Thailand, the deadline for filing Corporate Income tax is end of May. On the other hand, the mid-year tax must be filed half yearly to the Revenue Department. It must be submitted within August.

Usually, these corporate income taxes are paid by partnerships and limited companies in Thailand, earning from activities in Thailand. The taxable profit is obtained for the total of all revenue less allowable expenditure during the accounting period.

The following expenses include;

• Ordinary and necessary expenses
• Depreciation (specific depreciation rates and initial allowances apply)
• Donations of up to 2% of net profits
• Expenditure after entertainment up to 0.3% of the higher gross receipts
• Paid up capital at the end of accounting period that shouldn’t exceed 10 million baht;
• Interest expense

Generally, the Revenue Department does not consider the following as expense:

• Reserves (exceptions do exist);
• Expenses without having enough supporting documentation
• Withholding tax paid on behalf of the supplier unless it is agreed in writing.
• Expenditure where the recipient cannot be identified;
• Penalties, surcharges as well as criminal fines imposed by tax law;
• Expenses relating to a prior period that had not accrued at the end of the period; and

Also, there are specific rules that are applied to the tax on dividend income. However, losses that are carried forward (past five accounting periods) are offset against taxable profits. As for the Mid-Year Tax Return (PND 51), it will be calculated from the amount (tax) payable on the estimated net profit of the fiscal year.