Thai Personal Income Tax Exemptions
Is there any exemption from personal income tax in Thailand?
Yes, there are certain types of income that are exempt from personal income tax in Thailand. In respect of income from employment, money derived in the form of per diem, traveling expenses and certain fringe benefits such as medical treatment are tax exempt. The exemptions also cover the share of profit obtained from a non-juristic body of persons, maintenance income derived under moral obligation, corpus of a legacy or inheritance, income of a mutual fund or from the sale of investment units in a mutual fund, etc.
Contact MSNA for you Thai accounting and tax questions.
Thailand Factory License – things to be considered
When applying for a factory license in Thailand, the Ministry of Industry has the power to issue regulations for all of the categories regarding:
- Description, category, or type of machinery and equipment to be used in the operation of the factory business
- Location, environment, interior and description of the factory;
- Requirements for workers who have specific knowledge to carry out any duties in the factory;
- Process of manufacture and provision of equipment to prevent, stop or alleviate danger, damage or disturbances that may occur to the public or property in the factory or nearby premises;
- Standards and procedures for the control or release of waste, pollution or anything else arising from factory operations which may affect the environment;
- Provision of necessary data and documents by the factory operators to ensure compliance with the law
- Provision of anything that may affect the safety of work operations.
If there is an inspection of a factory or machinery to ensure compliance with the Act, a private body may carry out the inspection and report in place of government officials, provided the private persons follow the regulations concerning the Act as per the Government Gazette.
Licenses granted are valid until the end of the fifth calendar year from the year in which the business starts operations, except in the case of the relocation of the factory or of the dissolution of the operation in the factory business (which also refers to the event that the factory is transferred, leased or subjected to hire purchase). In these cases, the license is regarded as having expired on the date of issuance of a license to the factory’s new operators, or on the date of dissolution of factory business.
Applications for renewal of license must be submitted prior to the date of expiration, along with a fee of 100,000 Baht. Following submission, renewal is considered to have been extended unless there is a specific order otherwise. If the application is submitted within 60 days of the expiration date, it will be processed normally, but an additional fine of 20,000 Baht will be levied. Once the expiry date is reached, an application for a renewal must be made within 60 days. Upon expiration of the sixty-day period, the application will be treated as if it were a new application.
Contact MSNA for getting factory license for your business in Thailand.
Depreciation method for SMEs
Small and medium enterprises in Thailand with fixed assets but not including land, with a value of no more than Baht 200 million and with no more than 200 employees, are entitled to the following special depreciation methods:
- Machinery and equipment may initially be depreciated at 40% of cost and the remaining balance will be depreciated at the maximum rate of 20%.
- Computer hardware and software may initially be depreciated at 40% and the remaining balance will be depreciated within three accounting periods.
- Factory buildings may initially be depreciated at 25% and the remaining balance will be depreciated at a maximum rate of 5%.
SMEs with a paid-up capital at the closing date of the accounting period of not exceeding Baht 5 million and earning income from the sale of goods or provision of services of not exceeding Baht 30 million during the accounting period are entitled to depreciate machinery acquired during the accounting period are entitled to depreciate machinery acquired during the period from 1 January 2012 to 31 December 2013 at 100% of cost.
Contact MSNA for your Thai accounting and tax questions.
Thai Personal Income Tax – Penalty and Surcharge
Today, we talk about the penalty and surcharge for late filing of personal income tax returns or in the event of wrong declaration of tax in the returns.
A penalty is imposed to a taxpayer by the assessment officer in the event of filing a wrong return or failure to file the return. The rate of penalty is 100% in the case of an inaccurate return and 200% for failure to file a return. The penalties may be reduced by 50% if the taxpayer submits a request in writing and the assessment officer is of the opinion that the taxpayer did not intend to evade tax and cooperated with the officer during the tax audit.
Hence, any person who fails to pay or remit tax within the due date is liable to pay a surcharge of 1.5% per month, or fraction thereof, of the amount of tax to be paid or remitted subject to a maximum equal to the amount of tax to be paid or remitted.
Contact MSNA for preparation and filing of your personal income tax returns in Thailand.
Tax on Branch Profit
When we have a branch office in Thailand, are we liable to pay taxes to the Thai government on overall income?
No, branches of foreign companies in Thailand are liable to pay income tax at the normal Corporate Income Tax rate on locally earned income only. Hence, branch incomes that are remitted to the head office overseas are subject to an additional tax of 10%.
Branches of foreign commercial banks however are exempt from this tax in respect of their profits derived from the “out-out business”.
Contact MSNA for your Thai accounting and tax questions.
Thai Limited Company Registration – Corporate Name Reservation
Today, we talk about the first step of the company registration process, the corporate name reservation.
To reserve a name, the company can either submit a signed Name Reservation Form (one of the promoters is required to sign in such form) to the Department of Business Development of the MOC or fill in a Name Reservation Form and submit it through the Department of Business Development’s website.
The promoter is required to provide the requested company name together with two alternative names. The registrar will then examine the application in order to ensure that:
(a) No similar company name have previously been reserved; and
(b) The names do not violate any ministerial rules
If the applicant’s preferred name is in conflict with either of the above, that name will be rejected and the registrar will consider the two alternative names submitted. This process can normally be completed within 2 to 3 working days. If all three names submitted are rejected, the applicant will be required to re submit the form with 3 new names.
The registrar has considerable discretion with regard to the matter of company names. Oftentimes, the first name or even the first two names are rejected due to the violation of one of the two rules stated above. Once the name is approved, the corporate name reservation is valid for 30 days, with no extensions. However, after the name has expired, the promoter can still re apply for Name Reservation again and again if the name is still available.
We will talk about the next steps of the company registration process in the succeeding articles. Contact ThaiLawyers for company registration in Thailand.
Visa and Entry Permit Stamp in Case of Lost Passport
I have just extended my non-B visa and got a new permit of stay until next year. However, I lost my passport recently and no one has ever contacted my Embassy here in Bangkok to return it so I consider it gone. Can I apply for a new passport but can I have it stamped at the Bangkok Immigration with the same permit of stay? I will appreciate any feedback. Thanks.
Yes, you can get the same stamp but first, you have to report of lost passport at the nearest Police Station and obtain the Police Report document. Then, you should contact your Embassy in order to get a new passport. After obtaining the new passport, you must bring it together with the Police Report to meet with the Immigration official in order to obtain a copy of entry stamp, non-B visa and stay permit in your new passport.
Lost your passport in Thailand? Contact the Thai lawyers of MSNA for assistance in obtaining a police report of lost passport and getting the Immigration stamps on your new passport.