The Thai Cabinet, during its meeting on 13 September 2011, has approved the
guidelines to refund the excise taxes for the qualified first time car buyers
in order to promote the auto manufacturing industry and to increase purchasing
power by lowering the cost burden for people acquiring the necessities for
daily living. At the same time, it would enable the Government to earn more from the collection of corporate income tax, value-added tax, and car excise tax.

How to become eligible for excise tax refund as a first time car buyer?

Answer:

According to the scheme, the following criteria to become eligible for the excise tax
refund are as follows:

– The first time car buyer must be at least 21 years old and the car purchased must
also be manufactured in Thailand, excluding those produced with imported used parts.

– The car purchased is the first car of the buyer and the purchase is made during September 16, 2011 to December 31, 2012.

– The car must be a passenger car with the engine capacity of not over 1,500 CC or
pick up or double cab and must not be assembled from used parts imported from
overseas.

– The buyer must possess the car for at least 5 years and the buyer must claim for
the refund with the Excise Department along with a letter confirming the
non-transfer of car within 5 year period and copies of hire purchase contract
in case the car is hire purchased.

– The Department of Land Transport will record the 5 year non transfer condition in
its data base and also in the car registration book and will also check and disallow any such transfer within the 5 year period.

How much excise tax can be refunded?

Answer:

The excise tax will be refunded based on actual excise tax paid but not exceeding
THB 100,000 per car. The refund will be made after one year of possession
starting from October 1, 2012.

For questions about Thailand accounting and taxation, please contact MSNA, Thailand Accountant.

THAI ACCOUNTANT summarized the simplified rules that have been issued under the Notification of Director-General of Revenue Department No. 182 where a VAT registered person (or company) wishes to issue a tax invoice as part of a set of commercial documents, e.g. the tax invoice is within the same set together with the delivery note, receipt, etc.

If the tax invoice is not the first document in the set, the requirements are as
follows:

• The tax invoice and the copy of the tax invoice must contain the phrase “Documents in a Set”.
• The copy of the tax invoice must also contain the phrase “Copy of Tax Invoice”.
• The above phrases must be printed by the computer as part of the preparation of the tax invoice by the computer system. It is not acceptable to use a rubber stamp or typewriter to make such phrases or to handwrite them on the documents.

This has been effective from 18 June 2011.

If you have any tax or accounting questions, please contact MSNA.

Today, THAI ACCOUNTANT got a question on VAT regarding exported services.

Do we have to charge VAT if we provided services to a company outside Thailand? If so, at what rate should we charge?

Answer:

Under the old law (Notification of Director-General of Revenue Department on VAT No.
105), services rendered overseas were subject to VAT at the rate of 0% under
the circumstances that the service had to be used entirely outside of Thailand. However
under the new law (Notification of Director-General No. 181), if the services are
used partially within and partially outside Thailand, then it is possible to
allocate the VAT so that it is partially subject to 7% VAT and the services
used partially in a foreign country will be zero-rated.

Eventually, if your services to your overseas clients are done in Thailand but the product of the service is used outside of Thailand, you don’t have to charge 7% VAT.

This is applicable to any activity that is performed to generate a valuable benefit other than sale of goods. However, this does not apply to travel and tour services in a foreign country.

Contact MSNA, Thailand accounting firm for your accounting and taxation needs.

Today, THAI ACCOUNTANT got a question regarding the online filing of VAT.

Question:

We recently filed VAT return via the internet and paid for it by check but the clearing of this check took so long although we already filed VAT and made the payment before the deadline. Would it be considered late submission of VAT if the check was not cleared on time?

Answer:

At times like this, the Revenue Department sees that your company has a justifiable reason for the late payment and they usually consider extending the deadline of the VAT filing without imposing penalties and a criminal fine. However, you will still be liable to pay a surcharge at the rate of 0.75% per month on the amount of tax payable.

For Thailand taxation and accounting questions, please contact MSNA.

When an employer company pays rewards to its employees, there are both Personal Income Tax on the employee and Corporate Income Tax on the employer company to consider.

THAI ACCOUNTANT got a question about the tax implication when paying monetary rewards to employees as follows:

Question:

The Company used monetary rewards as an incentive for employees to improve performance or reduce operating costs. Such rewards are paid at a rate of 3% of the profit before corporate income tax based on profit and loss figures reviewed quarterly. However, if in any quarter the company incurs a loss, the rewards would not be given. What does the Company has to consider tax-wise.

Answer:

The amount of money received is considered as assessable income of the employees pursuant to Section 40 (1) of the Thai Revenue Code and must be included in the personal income tax computation of the employees. And the Company is responsible to deduct withholding tax as per Section 50 (1) of the Thai Revenue Code at the time of payment.

From a corporate income tax perspective, even though the payment is based on a profit that the company makes every quarter as opposed to the profit at the end of accounting period, it is evident that the payment is based on profit and no compensation is paid if the company generates no profits. Therefore, the payment is a non-tax deductible expense in
accordance with Section 65 ter (19) of the Thai Revenue Code.

Please contact MSNA for more information regarding accounting and tax in Thailand.

Today, THAI ACCOUNTANT got an interesting question regarding Corporate Income Tax:

Question:

We, a registered Thai company, are entitled to receive dividends from our subsidiary company in Japan. How will this affect our Corporate Income Tax?

Answer:

Dividends received by Thai Companies from their subsidiaries which are foreign companies located overseas are exempt from corporate income tax provided that the following conditions are met:

– Thai Companies that receive dividends must hold at least 25% of shares with voting rights in the foreign company;

– Upon receipt of the dividends, Thai Companies must have held the shares for at least 6 months from the date of acquiring the shares in the foreign company;

– Dividends received must be paid out of the foreign company’s taxable profits which are subjected to normal rate of at least 15% in accordance with the foreign tax laws.

In the case that there is a tax exemption or reduction on taxable profits from the normal tax rate due to special rules or regulations in the foreign countries, the dividend income received by the Thai companies is still exempted from corporate income tax in Thailand.

If you have any tax or accounting questions, please contact MSNA.

Today Thai Work Permit Expert got an interesting question about Work Permit Holder with Dependents in Thailand.

What kind of visa should a dependents of a Thai work permit holder apply in order
to stay in Thailand legally?

Answer:

A dependent (e.g. spouse, children below 20 years of age and parents) of a
foreigner holding a Thai work permit is suitable to apply for a Non-Immigrant
Visa “O” in order to stay in Thailand. However, unmarried or same-sex
relationships are not recognized under Thai Immigration law and therefore not
qualified as dependents to apply for a Non-O visa.

Non-O visa holders are not permitted to work unless he/she obtained a valid Work
Permit on their own. Such dependent holding a Non-O visa must first obtain a
Non-B visa to be qualified to apply for a Work Permit. For example, a foreign
husband of a foreign teacher holding a Thai work permit must apply for a change
of his visa from Non-O to Non-B if he wishes to work here in Thailand. After
obtaining a Non-B visa, he can now apply for a Thai work permit.

Meanwhile, for the children below 20 years old holding a Non-O visa, they are also
required to apply for a valid Education visa if they will study here in Thailand.

Contact MSNA, thailand workpermit expert, when you need to have a Work Permit to work in Thailand.

As required by the Thai law, all Thai registered companies, joint ventures, foreign businesses operating in Thailand and other forms of juristic entities are required to have their fiscal year-end financial statements audited by an independent auditor. This audit, sometimes called external auditing, is a kind of audit conducted in accordance with specific laws or generally accepted auditing standards on the financial statements of either a company, government sector, other legal and registered entity or organization. The auditor who conducts the audit must be appointed and independent of the entity that is being audited. The external auditor will then present an independent and fair audit report which is essential for the end-users of audited financial statements such as the entity’s investors, shareholders, financial institutions, government agencies like the Department of Business Development and the Revenue Department and the general public, etc.

With the specific auditing standards being followed, careful planning and professional thinking are required to obtain a reasonable assurance in checking the accuracy and completeness of the financial statements. The procedures also include evaluation of the significant policies and assessment of accounting standards used by the management of the entity specifically how the overall financial statements are presented.

Contact MSNA for your audit needs whether it is an external or internal audit.

Today, we discuss what to do with your work permit and visa when changing employer in Thailand.

Question:

I am a foreigner who has a work permit working for a Thai company but am moving to a new job. What should I do to ensure the transition is smooth in terms of my work permit and visa?

Answer:

Before you leave the old company, make sure you agree with them on the date of your official resignation which should be the same day that they will inform the Labour Ministry of your resignation, or agree with them the day you will return the work permit to the Labour Ministry. On the same day you return the work permit, you must take your
passport to the Immigration Bureau to cancel the extension of your stay otherwise
you will be overstaying your visa. The immigration officer will stamp in your passport that you have to leave the country right away. You will then apply for an extension of stay, which they will allow only 7 days. On the same day, your new employer should submit the work permit application for you so that it can be done within the 7 day period that you have got in your passport. While waiting for the new work permit, the new employer should get all the documents ready for extending your permit of stay from 7 days to one year based on the new work permit. Once you pick up your new work permit, you must go to the Immigration Bureau to submit the documents to extend your permit of stay right
away, which must be before the end of the 7 day period that you got.

In this case, you do not have to go out of Thailand to apply for a new Non-Immigrant Business Visa.

Please note that it is not always possible for the Labour Ministry to produce your new work permit within the 7 day period that you got. It usually takes at least 7 business days for a work permit to be ready to pick up, but your 7 day period is one calendar week.
This is when you need MSNA, Thailand work permit and visa expert to help. We will make
sure your work permit and visa transition is done correctly and within the little time limit the Immigration rule allows.

A question to Thai Work Permit Expert, Is it Possible to Use Old Non B Visa to apply for New Work Permit in Thailand?

Question: We have a registered company here in Thailand. In the event that a Non-B visa of our new foreign employee does not expire at the same time as his old work permit with his previous employer, can he use the same visa to apply for a new work permit sponsored by our company?

Answer:

1. If the Visa referred to is a multiple – journey visa granted to him by a Thai Consulate overseas, and when he comes in each time with the said visa, the immigration officer at the airport gives him a 90 day permit of stay, then his Non-B visa that he has can be used to apply for a new work permit.
2. If the Visa referred to means the permit of stay in the Kingdom that was extended to a longer period when he had his work permit (his permit of stay in Thailand was extended based on the fact that he was working with his previous employer), when his work permit expires or when he leaves the old company, he has to take his passport to the Immigration Bureau to cancel the extended permit of stay right away. The immigration officer will stamp in his passport that he has to leave Thailand right away. This means that if your new foreign employee has left the old company, or his old work permit has already expired and he has not taken his passport to Immigration Bureau to cancel the extended permit of stay, he is considered having already overstayed his permit of stay. Overstaying a permit of stay incurs a fine of Baht 500 per day (Baht 20,000 maximum) from the time that he started to overstay (in this case, the day that his work permit expired). Paying for the fine does not prevent the foreigner from being deported. In this case, he has to leave Thailand and comes back in with a new Non B visa so as to be able to apply for a new work permit.

Consult with MSNA Thailand Work Permit and Visa expert , before you make a move on your work permit and visa in Thailand.