Invoice and Tax Invoice
One of the topics of training that we provide for our accounting clients’ staff is the invoice, receipt and tax invoices. Today, we talk about when to issue a tax invoice if you are a company engage in service business.
Normally when you invoice your clients for your services or deposits, you give them only an invoice. Because you are a service business, you do not need to issue a Tax Invoice until you are paid. So some companies combine their receipt and tax invoice into one document.
Some of your clients may be demanding, especially the bigger ones. They may ask that you submit a Tax Invoice at the same time as invoicing them. This is normally the case that they want to force their service providers to give them the Tax Invoice before they pay because sometimes when they pay, the vendors may give them a receipt but not a tax invoice, or the tax invoice may not be 100% correct and the clients find it too hard to follow up with the vendors to reissue the tax invoice. If some of your clients demand that you also send them the Tax Invoice at the time you invoice them, we think you want to comply with them even though the Thai tax law does not say so. However, you will have to submit the VAT to the Revenue Department within the 7th of the following month after you issued the tax invoice.
Contact MSNA for your Thailand accounting, tax and business needs. Our Thai accounting and Thai payroll services include consultation with our English speaking accountants in terms of Thai accounting and tax laws, labor issues and other related matters.
Required Documents to Change the Registered Company Address
When you want to change your official company address, you have to submit the forms together with the required documents to the respective government offices. Today, we talk about the required documents from the company and the landlord when changing the official company address with the Department of Business Development and the Revenue Department.
Aside from company registration papers, the following will be required from the authorized director of the company:
- 2 sets of passport copy, duly signed (in case of a Thai national, 2 sets of signed Thai ID card copy)
- 2 sets of location map of the new office address
- 2 sets of photos of office showing the:
– Company name and house number
– Outside photo of the whole office or building
– Inside photo of the office
The following will be also required from the landlord:
- Signed copy of House Registration of the place, 2 sets
- Signed copy of letter of consent from the real owner of the place that says he gives permission to the company to use it as the official address, 2 sets
- Signed copy of the documents showing the ownership of the place by the real owner, i.e. copy of the ownership paper issued by the Land Department (same with the sale agreement stating the name of the owner as the buyer of that place which is the document issued by the Land Department when he bought the place), 2 sets
- Signed copy of the owner’s ID card and his house registration, 2 sets
If you are moving to a new office and would like to change the official address accordingly, MSNA can assist you in preparing the required documentation and submit the application with the respective government offices. And since most of the above mentioned documents from the landlord are in Thai language, we normally request for the contact information of the landlord so we can coordinate with them directly. Contact us now for further discussion.
Write-off of Assets
Today, we got a question from one of our avid readers regarding written off fixed assets in Thailand.
What is the accepted method of writing off assets like computers, office equipment, etc., in Thailand? Is it straight line depreciation over a fixed period?
Most fixed assets are written off over 5 years.
Computers can be depreciated 40% on the acquired date. The rest of 60% will be depreciated over 3 years.
Leasehold improvement must be depreciated over 20 years, in general.
Contact MSNA for your Thai accounting and tax questions.
Foreign Currency Account in Thailand
Are foreigners allowed to open foreign currency bank account in Thailand? How about a bank account in Thai Baht currency?
Yes, foreigners or non-residents may open and maintain foreign currency bank accounts with authorized banks in Thailand without limit. The accounts can be freely credited with funds coming from abroad. Payments from Thai residents or borrowing from authorized banks can be deposited subject to supporting evidences. Moreover, balances on such accounts may be freely withdrawn.
Non-residents may also open Thai Baht accounts with authorized banks in Thailand as follows:
1) Non-resident Baht Account for Securities (NRBS): The account may be debited or credited for the purpose of investment in securities and other financial instruments such as equity instruments, debt instruments, unit trusts, derivatives transactions traded on the Thailand Futures Exchange and the Agricultural Futures Exchange of Thailand;
2) Non-resident Baht Account (NRBA): The account may be debited or credited for general purposes (i.e. other than investment in securities) such as trade, services, foreign direct investment, investment in immovable assets and loans.
The total daily outstanding balances for each type of account shall not exceed THB 300 million per non-resident. However, transfers between different types of accounts are not allowed.
Contact MSNA if you need assistance in preparing the requirements to open a bank account in Thailand.
Thai Taxation – Inventory Report
One of our accounting clients has asked us about the preparation of inventory report.
Is it mandatory for all Thai companies to prepare the inventory report? Do you provide this service?
Sorry, but we do not prepare inventory movement report for our clients. It is the responsibility of every VAT registered Thai company that produce, import or sell products.
The Revenue Code of the Thai Revenue Department specifies that VAT registrants must not only keep in input VAT and output VAT reports but also stock or goods and inventory records. Since your company sells products, you need to print out and prepare the inventory movement report in the format set by the VAT law (it is like a stock card, each model one report). Even though you never keep stock, you need to prepare this report.
Each model has to have a stock card in the format set by the Thai tax law. Apart from the header of the report, each stock card contains the following columns:
Date, Document Number, Quantity In, Quantity Out, Balance
And when you import it or sell your product, you need to fill out this report within 3 days. If the Revenue Department comes to check your company, they will ask to see this report. And if they see that you do not have it, or it is not correct, they will fine you.
Contact MSNA for your Thai accounting and tax questions.
Thailand Audit – Procedures to be done to finalize the audited accounts
Today, we got a question from one of our accounting clients regarding audit.
We are not familiar with what procedures are needed to be done to finalize audited accounts. Could you kindly advise us?
Our sister company, MSN Audit Ltd., can provide you their audit service. It includes preparing the audited financials in Thai for filing with the authorities and in English for the management.
You need to hold an Annual General Meeting (AGM) to approve the audited financial statements within 4 month from the accounting year-end. And you need to file the audited financial statements with the Ministry of Commerce within 1 month after that. Also, the annual corporate income tax must be filed with the Revenue Department within 150 days from the accounting year-end. Because you hired Libra Accounting Ltd., as your accountant for the whole year, we will prepare the tax return and file those things for you complimentary.
MSNA Ltd., can help you prepare an AGM with the Minutes of Meeting, publishing the AGM notice in a local newspaper and also sending it by return registered mail to all the company shareholders.
Contact MSNA group for your Thai accounting, Thai tax, Thai audit and related business needs.
Setting up a Thai Company to Open a Fertility Clinic
Can foreigners set up a Thai company in order to open a fertility clinic in Thailand?
Yes, foreigners can set up a Thai company and operate a fertility clinic in the Kingdom. The steps involved are:
- Set up the Thai company
- Have fully equipped clinic ready to do the services/business
- Apply for the licenses, where the officials will come to check your facility
We think your biggest challenge is to find at least one doctor, i.e. Obstetrician Gynecologist who will hold the license for your clinic. And if you hire more doctors to work at this clinic, all of them need to apply for a license to work at your clinic and they have to be gynecologists like the first one. If any of the doctors are not Thai, they will still need to have the medical license from Thailand.
Contact ThaiLawyers for company setting up, visa and work permit and related business licenses application in Thailand.
Thailand Specific Business Tax Exemption on Loans to Employee or Inter company
The Revenue Department has recently set the condition for a Specific Business Tax exemption on certain businesses. Under the Royal Decree no. 571, such conditions are as follows:
On Employees Loan
– Interests from loans to employees by policy of a provident fund or other similar funds which give loan to employees for the company or registered ordinary partnership.
On Inter-company Loan
– Inter-company loans between companies not carrying on business of commercial banks, finance companies including payment for bills of exchange issued by or deposits made to financial institutions under the law on the financial institution in return for normal interest rate.
Contact MSNA for your Thailand accounting and tax questions.
New Thailand Personal Income Tax Rates
Under the Royal decree no. 575, the personal income tax rates for 2013 and 2014 income have been reduced. The new personal income tax rates are as follows:
Net income (THB)
New tax rates (%)
4,000,001 and above
Contact English speaking accountants of MSNA for your tax questions and for the preparation and submission of your Thailand personal income tax.
BOI Promotion of Data Center in Thailand
Data Center is classified as one of the priority activities by the Thai Board of Investment. In order to promote investment in Data Center, develop information technology infrastructure, and enhance efficiency and to reduce costs of doing business which are crucial to the development of Thailand as center for regional operating headquarters and information technology, the BOI has set the following conditions and privileges of activities eligible for investment promotion as follows:
- There must be hi-speed fiber optic telecommunications connection throughout data center.
- The main hi-speed telecommunications system must link data center with domestic and international telecommunications centers.
- There must be continuous power distribution backup system and backup power generator to support normal operation of information technology system.
- There must be high-efficiency air conditioning and filter system to support efficient device operation.
- Area of data center must not be less than 5,000 square meters.
- Complementary services for customers located in the project e.g. server co-location, managed service, customer’s server backup service, disaster recovery services (DRC), data center professional consultation etc. must be provided.
Contact MSNA for your Thailand BOI company registration, visa and work permit, accounting, tax and other business needs.