Thai Company Tax Rates

Bangkok Law Online Article BaseThai Company Tax Rates

Thai corporation tax (or corporate tax ) refers to as the percentage of the profits of registered companies, i.e. tax levied on the profits made by companies or associations. A newly established company in Thailand is liable for income tax and must obtain a tax I.D. card and number for the company from the Thailand Revenue Department within 60 days of incorporation or the start of operations.

If it is expected that its gross income will exceed 1.8 million baht per annum it must register for Value Added Tax within 30 days of the date they reach 1,8 million baht in sales.

A newly established company in Thailand must hire a certified accountant. Companies must keep books and follow accounting procedures specified in the Civil and Commercial Code, the Revenue Code and the Accounts Act. Documents may be prepared in any language, provided that a Thai translation is attached. All accounting entries should be written in ink, typewritten, or printed. A newly-established company or partnership should close accounts within 12 months from the date of its registration. The director is responsible for the regular keeping of books and documents in accordance with the law and must file balance sheets and audited accounts every year with the Revenue Department (www.rd.go.th) and Ministry of Commerce.

In general, the basic accounting principles practiced in Europe and the United States are accepted in Thailand.

The general corporate tax rate in Thailand is 30% for companies with a paid up share capital of more than 5 Million Thai Baht. The government has reduced corporate tax rates to promote specific business sectors and small and medium enterprises. The tax rate for companies with a paid up share capital not more than 5 Million Thai Baht at the end of its tax year shall be taxed at rate of:

15% over the first one million Thai Baht profit;
25% over the profit between one million and three million and;
30% for profits over three million Thai Baht.

Other:

Dividends distributed by a local company to its foreign shareholders are subject to a dividend withholding tax at 10%. This rate is not reduced under any of the double taxation treaties concluded by Thailand.
The rate of depreciation for capital expenditures is 5% for buildings.
Net losses may be carried forward over five consecutive years. No carry back of losses is allowed.
The director(s) of a company is responsible for the existence and regular keeping of books and documents in accordance with the law and this has to be done even though there is no business activity. The commercial registration department has the authority and could be closing down all those companies that are not actively trading or paying tax.

Personal income tax is imposed at a progressive rate ranging from 5 percent to 37 percent. Every person, resident or non-resident, who derives assessable income from employment or business in Thailand, or has assets located in Thailand, is subject to personal income tax, whether such income is paid in or outside of Thailand. Capital gains arising from transfer of assets (like property) is taxable income. There is no specific capital gains tax in Thailand. Capital gains are subject to tax in the same manner as any other forms of income.