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Archives for March 2011

Thailand Accounting Year – End – What do companies have to do?

Thailand accountants are busiest during the first 5 months of the year. The accounting period (12 months or in case of newly set up companies, less than 12 months) of most companies in Thailand falls on 31 of December of each year. If your company’s accounting year-end is 31 December 2010, then your Thai accountants should close the accounts of 2010 by now and have an auditor or certified public accountant audit the accounts. You need to have the audited financial statements ready by end of April. The laws require that these things need to happen:

  1. The company needs to hold an AGM (annual general shareholders’ meeting) within four months after the year-end, which is by 30 April 2011, to approve the audited financial statements of 2010.
  2. The company needs to file the 2010 audited financial statements with the Ministry of Commerce within 30 days from the AGM date.
  3. The company has to file the 2010 corporate income tax return and the audited financial statements with the Thai Revenue Department within 150 days from the accounting year-end, which is 29 May, 2011.

Failure to do any of the above will result in a fine and a possible jail term for the company’s directors in some serious cases.

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Who Should Pay Personal Income Tax in Thailand?

Personal Income Tax (PIT) is a direct tax levied on income of a person. A person means an individual, an ordinary partnership, a non-juristic body of person and an undivided estate. In general, a person liable to Personal Income Tax has to compute his tax liability, file tax return and pay tax, if any, accordingly on a calendar year basis.

Taxpayers are classified into “resident” and “non-resident”.

“Resident” means any person residing in Thailand for a period or periods aggregating more than 180 days in any tax (calendar) year. A resident of Thailand is liable to pay tax on income from sources in Thailand as well as on the portion of income from foreign sources that is brought into Thailand.

A non-resident is, however, subject to tax only on income from sources in Thailand.

Talk to your tax consultant like MSNA to find out if your income is subject to personal income tax in Thailand.

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Thailand Accounting Standards

Thailand Accounting Standards and Financial Reporting Standards are announced by Thailand Federation of Accounting Professions (FAP) and correspond with the International Accounting Standards (IAS) and the International Financial Reporting Standards (IFRS). The ones that are currently effective as of 1 January 2011 are summarized in the below table. Note that all of Thailand accounting standards and Thailand financial reporting standards have to be employed by all public companies in Thailand. Non-public companies may choose not to employ the accounting standards and financial reporting standards that FAP has exempted them from.

No. Thai Accounting Standard Public Companies Non-public Companies
TAS 1 Presentation of Financial Statements X X
TAS 2 Inventories X X
TAS 7 Cash Flow Statements X
TAS 8 Accounting Policies, Changes in Accounting Estimates and Errors X X
TAS 10 Events after the Balance Sheet Date X X
TAS 11 Construction Contracts X X
TAS 16 Property, Plant and Equipment X X
TAS 17 Leases X X
TAS 18 Revenue X X
TAS 19 Employee Benefits X
TAS 23 Borrowing Costs X X
TAS 24 Related Party Disclosures X
TAS 26 Accounting and Reporting by Retirement Benefit Plans X
TAS 27 Consolidated and Separate Financial Statements X
TAS 28 Investments inAssociates X
TAS 29 Financial Reporting in Hyperinflationary Economics X X
TAS 31 Interests in Joint Ventures X
TAS 33 Earnings Per Share X X
TAS 34 Interim Financial Reporting X X
TAS 36 Impairment of Assets X
TAS 37 Provisions, Contingent Liabilities and Contingent Assets X X
TAS 38 Intangible Assets X X
TAS 40 Investment Property X X
No. Thai Financial Reporting Standard Public Companies Non-public Companies
TFRS 2 Share – Based Payments X
TFRS 3 Business Combinations X X
TFRS 5 Non-current Assets Held for Sale and Discontinued Operations X X
TFRS 6 Exploration for and Evaluation of Mineral Resources X X

The Thai accounting standards that have been approved and will become effective for accounting periods that begin on or after 1 January 2013 are:

TAS 12 Income Taxes

TAS 20 Accounting for Government Grants and Disclosure of Government Assistance

TAS 21 The Effects of Changes in Foreign Exchange Rate

Source: as of 18 March 2011

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