Today, we outline the two sections of the Revenue Code which talk about the assessment of corporate income tax from gross income and why a Thai company may be liable to submit income tax on behalf of its oversea-based parent company.

Section 71 – Assessing tax from gross income

In the case where:

(1) a company or juristic partnership does not file particulars necessary for tax calculation under the provisions of this Part or does not keep a book of account or does not follow requirements prescribed under Sections 17 and 68 Bis or does not bring books of account, documents or other evidence to an assessment official for interrogation under Section 19 or Section 23, the assessment official shall have the power to assess tax at the rate of 5 per cent of gross income before deduction of any expenses or gross sales before deduction of expenses of the accounting period, whichever is higher. If gross income before deduction of expenses or gross sales before deduction of expenses cannot be determined, the assessment official shall have the power to assess by comparing with the gross amount of the previous accounting period. If the amount of the previous accounting period cannot be determined, he shall assess as he deems appropriate.

(2) If any company or juristic partnership does not record particulars or records incompletely or does not record accurately within an account as prescribed under Sections 17 and 68 Bis resulting in paying no tax or less tax, an assessment official shall have the power to assess missing tax at the rate specified in Section 67 and may order that person to pay surcharge of two times of the amount of missing tax.

(3) If any company or juristic partnership does not comply with the Director-General’s order which is exercised under Section 17, an assessment official shall have the power to order that company or juristic partnership to comply with the Director-General’s order within thirty days from the date of receiving the order of such assessment official or he may order it to provide a person to comply with the Director-General’s order at the office of the assessment official within the above time period. If the company or juristic partnership does not comply or complies incompletely, the assessment official shall have the power to assess tax at the rate and procedures as mentioned in (1).

The provisions of this Section does not prevent the rights of an assessment official to assess tax payment under the provisions of other Sections.

The assessment under the provisions of this Section may be appealed.

Section 76Bis – A company incorporated under foreign laws which shall be deemed to be carrying on business in Thailand

For a company or juristic partnership incorporated under foreign laws which has an employee, an agent or a go-between for carrying on business in Thailand and as a result receives income or profits in Thailand, such company or juristic partnership shall be deemed to be carrying on business in Thailand and the person who acts as an employee, an agent or a go-between for the business, whether he is an individual or a juristic person, shall be deemed to be the representative of the company or juristic partnership incorporated under foreign laws and shall have the duty and liability to file a tax return and tax payment in accordance with the provisions of this Part, with respect to only the above mentioned income or profits.

In the case mentioned in paragraph 1, if a person who has the duty and liability to file a tax return and tax payment cannot calculate net profits for tax purposes under the provisions of this Part, the provisions regarding tax assessment under Section 71 (1) shall apply mutatis mutandis.

The assessment under this Section may be appealed.

Contact MSNA for your Thai accounting and tax questions.

Today, we talk about the application for bringing in foreign experts and technicians to work for promoted business under the Investment Promotion Act B.E. 2520.

The Foreign Expert Services Division, Investment Services Center, Office of the Board of Investment, offers services at the One-Stop Service Center for Visas and Work Permits to facilitate the bringing in foreign technicians or experts, as well as their families, into the Kingdom to work for businesses promoted under the Investment Promotion Act B.E. 2520

The procedure has two steps:

STEP 1: The company submits an application at the Foreign Expert Services Division requesting approval of the positions of the foreigners.

This step involves submission of a document describing the company’s objectives and the necessity to bring in foreigners to work in specified positions, the personnel plan of the company showing the number of positions of foreign experts or technicians required and the periods during which foreign technicians or experts are required to work for the company.

Required documents:

1. Form for Requesting Permission to Bring in Technicians (F FR NI 01)
2. The company’s organization chart

The chart must show the organization’s lines of responsibility, specifying the positions for which approval is requested. The positions which have been approved must also be shown on the chart.

1. Form F FR NI 02 (Kor Kor Tor 41)

The following details are required:

– Position titles in English

– Job descriptions, covering all actual jobs required

– Job requirements

– Duration (The periods during which the foreigners are required)

1. A copy of Investment Promotion Certificate

A copy of the main Investment Promotion Certificate is required. In case of multiple certificates, only the ones relevant to the request should be attached.

1. A copy of the License to Commence Operations

In the event the company is not in a position to furnish the License to Commence Operations, a written explanation, stating the reason (s) and the current stage of the company’s business plan shall be required.

1. A copy of the Company Registration Certificate

The document must not be older than six months, as of the submission date.

1. A copy of a list of shareholders

An up-to-date list of shareholders and their shareholdings is required. For public companies, the document provided must contain pages showing the major shareholders and the ratio of Thai to foreign shareholders.

1. A copy of Balance Sheet and Profit & Loss Statement
2. All documents (except the ones issued by the Office of the BOI) must be signed by the authorized directors as specified in the Company Registration Certificate with the company seal affixed, or by a person duly authorized by the directors (with a Power of Attorney clearly specifying the authorized powers and duties and a thirty-baht duty stamped affixed).

Once approved, the company will receive a Letter of Approval for use as a reference in Step 2.

In case it was not approved, a written notification is issued to the company.

STEP 2: The company files an application at the Foreign Expert Services Division requesting approval to bring in foreigner to work. (Filing the approved positions)

The foreigners in question will need a non-immigrant category “B” visa to enter the Kingdom. They need to obtain the visa at a Thai embassy or consulate in a foreign country and to declare the objective of entering the country to work. Upon arrival into Thailand, their non-immigrant category “B” visa will be stamped by immigration. After that, they are required to request an extension of their stay in order to work.

Documents required in Step 2:

1. A company letter containing details and reasons

The letter shall mention the company’s intention to fill the specified positions with details of the individuals (names specified and justifications provided as to why such persons are suitable for the jobs) being proposed to fill the positions.

1. A Bio-data form

Once approved, a written notification is issued to the company, the Immigration Bureau and the Department of Employment

However, in the event that it is not approved, a written notification will be issued to the company.

Interested in obtaining BOI promotion in Thailand, contact ThaiLawyers for BOI application, Thai company registration, visa and work permit application for bringing in foreign experts and technicians to work for your company.

Today, one of our accounting clients has asked us about any tax implications of reimbursing phone and car expenses to their employees.

Question:

As a company policy, we have to reimburse phone bills of our employees provided that their personal phones are used in doing their jobs. When we pay our employees for such expense, do we have to withhold any tax? Please advise.

Answer:

Normally, when the company provides mobile phone allowance to employees, this benefit will be part of their income and therefore subject to personal income tax. But since it is in your company policy to pay phone bills to your employees who used their personal phones for the company’s business, this is not considered as employee’s benefits and therefore, is not subject to withholding tax. However, you just have to make sure that phone expenses were related to your company’s business and the employees provide the original bill. Phone expenses are to be reimbursed on an actual basis, but should not exceed THB 1,000.

Contact MSNA for your Thailand accounting and tax questions.

In the case where Thailand Board of Investment grants promotion to any applicant, the BOI may set conditions in the promotion certificate for the compliance by the promoted person in one or more areas as follows:

(1) Amount and source of capital;

(2) Nationality and number of shareholders;

(3) Size of activity including the types of products, commodities or services and the production or assembly processes and capacity thereof;

(4) Amount of local raw materials to be used;

(5) Nationality and number of workers, technicians and experts;

(6) Training and employment of manpower;

(7) Prevention and control of damaging elements to the quality of the environment;

(8) Period of time to commence the implementation of the promoted project;

(9) Period of time to place orders for the purchase of machinery;

(10)Period of time to import machinery into the Kingdom;

(11)Period of time to re-export the imported machinery after the termination of their use;

(12)Extension of time limits under (8), (9) or (11);

(13)Date of commencement of operation;

(14)Report on implementation of the project and operation;

(15)Report on the performance of the training provided by the foreign technicians and experts to the Thai personnel;

(16)Requirements that the products or commodities produced, assembled or exported conform to the standards prescribed either by the Board or other government agencies;

(17)Distribution of products or commodities produced or assembled or services rendered;

(18)Export of products or commodities produced or assembled;

(19)Requirements that the cash, bank guarantee, the Thai government securities or other securities deemed appropriate by the Board, be deposited with the Office for the purpose of guaranteeing the compliance with the conditions stipulated by the Board;

(20)Other matters relating to the provision of facilities to the competent official, granting, exercising or controlling of the rights and benefits under this Act.

Application for Thailand BOI promotion would be easier if you have a partner to guide you in the application process. Contact ThaiLawyers for BOI promotion, company registration, visa & work permit and further Thailand BOI questions.