When an employee of a Thai company incurred expenses for an overseas business trip which can be refunded from the organizers abroad, the Thai company can payback its employee for the expenses incurred and reimbursed it from such overseas based company through the following:

1. All official receipts must be issued to the Thai company. Those receipts will be treated as expenses of the company so that when it issues an invoice to the overseas based company, such amount will be treated as income of the Thai company, which 7% VAT has to be added in the invoice; OR
2. All receipts (amount of expenses and VAT) will be recorded as Account Receivable from overseas based company so that when it issued an invoice to the overseas based company, it should use the wording “reimbursement at cost”. In this way, all the receipts that the company cannot claim back the 7% VAT will also be reimbursed. There is no need to add 7% VAT in the invoice because the company is reimbursing the whole amount plus VAT that appears on the receipts.

If you are looking for English speaking accountants that can handle your accounting and tax filing in Thailand, contact MSNA now.

In Thailand, individual and corporate investors have different tax rates on interest based on profits from investment in debt instruments.

For domestic investors, withholding tax rate for individuals is 15% and they can choose not to include it in their annual filing of personal income tax. For companies or juristic partnerships, withholding tax rate is 1%.

For foreign investors, withholding tax rate is 15% for both individual and company or juristic partnership with exception to countries having Double Taxation Agreement (DTA) with Thailand, which may be subjected to a lower tax rate.

Contact MSNA for your accounting and Thailand tax questions.

Our monthly accounting and tax services include preparation of the compulsory input VAT and output VAT reports for the clients. We deliver everything as promised within the agreed upon deadline and make sure that the client’s accounts are prepared accurately. Thus, whenever we send the report to the clients, we ask them to check the report that we prepared because there have been cases where:

1. The clients go back and change the amount in some tax invoices and fail to inform us and send us the updated version

2. The clients did not send us all the tax invoices they issued during the month and assumed that they sent everything to us already then, the issue arises when some tax invoices where not included in the Sale VAT report which resulted to huge amount of Value Added Tax to pay to the Revenue Department

We therefore learned that we must get the clients to confirm that the monthly VAT report has the correct details of all the tax invoices issued during the month and the amounts are the same as the original invoices.

With our extensive knowledge and expertise in the Thai accounting and tax laws, we ensure that we provide valuable source of advice and solutions to our clients. If you are looking for an international standard professional services providers at reasonable prices, MSNA is your right partner.

One of our tax clients asked us on how to revalue the land and houses in Thailand. Normally, land ownership is not possible to foreigners but there are certain ways on how foreigners can own land in Thailand. Our client has set up a Thai majority owned company.

If the company is engage in the business of real estate (buy and sell of land and houses), the land and houses are treated as inventory so the appreciated amount will be income to the company. Thus, when the company revalues the land and houses, it has to book the gain/loss into the company’s profit and loss statement, whereas there are taxes to be paid in case of profits.

However, if the company is not selling real estate, the land is just a normal fixed asset. In summary, if you get the revaluation report and it shows that the land’s value has appreciated and you want to book the appreciated amount in the company’s accounting, it will be booked in the shareholders’ equity section of the Balance Sheet, not as an income in the Profit and Loss Statement. That means no tax to pay yet.

To explain it further, according to the Thai Revenue Department’s Revenue Code Section 65 Bis, value of assets other than value of stock on the last day of an accounting period shall be calculated in accordance with the cost or market price, whichever is lower, and such value shall be deemed to be the value of stock carried forward into the new accounting period, shall use the normal purchase price of such asset and in the case of appreciation in the value of the asset, such appreciation shall not be included in the calculation of net profit or net loss. If any item of assets is entitled to depreciation or depletion, depreciation and depletion shall be deductible in the calculation of net profit or net loss in accordance with the rules, procedures, conditions and previous rates applicable before the appreciation in the value of assets by deducting and only the remaining period and remaining cost of capital of the assets shall be deducted.

MSNA provides accounting, tax, due diligence, payroll and related business services. Contact us now for initial consultation.

One of our accounting and tax clients consulted with us regarding a Thai company making payments to its vendors overseas.

In response, we explain that when a company in Thailand wants to make payments to overseas, one needs to consider 3 things:

1. If it is for services, in most cases, the company will need to withhold some taxes from the payment and submit it to the Thai Revenue Department.
2. For paying an overseas vendor, the Thai company will have to submit 7% Value Added Tax (VAT) to the Revenue Department on behalf of the overseas vendor. To give an example, when a Thai company makes payment to a company in Singapore, VAT must be submitted with Form PP.36 by the 7^th of the following month.

Moreover, one must also take note of VAT and withholding tax when getting services from overseas.

• When a company in Thailand wants to make a money transfer to overseas, it is required to fill out some bank forms and provide them some kind of documents supporting the purpose of the transfer, e.g. a copy of the invoice from the overseas vendor, a copy of the loan agreement etc.

MSNA’s team of English speaking accountants can help you with your company’s Thai accounts, tax planning, audit and other matters regarding doing business in Thailand. Contact us now for initial consultation.

One of the questions our clients ask us the most is how much tax rate to use when calculating Corporate Income Tax in Thailand.

The corporate income tax rates depends on the amount of capital and its net income during the year. To explain it further:

1. If the company has less than THB 5 million capital and has less than THB 30 million income, the tax rates to be used are as follows:-

Tax Rate

First THB 300,000 = 0%

300,001 – 3,000,000 = 15%

Over 3,000,000 = 20%

2. If the company has more than THB 5 million capital and even if they decrease it later, it is fixed to 20% every year as long as the company is existing.

3. If the company has more than THB 30 million income and if the income decreases next year, it is also fixed to 20% as long as the company is existing.

Make sure your accounting and taxes are done properly and be mindful of the deadline for submission of corporate income tax and audited financial statements. Contact MSNA for consultation on Thai taxes and filing of requirements for your company in Thailand.

One of our accounting and tax clients wants some clarification regarding how withholding taxes in Thailand work particularly the withholding taxes on software license transactions.

Question:

Could you kindly confirm whether the 3% withholding tax rate applies universally to all software license orders? And in the event that we are required to pay the withholding tax at 3% rate for any type of software, are there any provisions or exceptions that would allow us to reduce the withholding tax rate to 1%?

Answer:

The 3% withholding tax rate is standard across all software licenses bought or paid for usage in Thailand. When you buy a software from overseas, you will need to submit the withholding tax (rates depending on the country) and 7% VAT on behalf of the overseas vendor(s) too.

Additionally, the Thai tax laws require buyers or users of software to withhold 3% tax. In your case, you should withhold it from the payment when you pay your vendors. You should not pay the withholding tax from your pocket. Anyway, you can check with us before making any payment to your new vendors to make sure you withhold the right amount accordingly.

MSNA can provide consultation on Thai taxes and accounting. And if you use our monthly services, our fees include consultation with our directors on tax and accounting issues. For instance, some vendors do not want you to withhold tax, we can discuss with you on what to do for withholding taxes from vendors in Thailand.

In Thailand, businesses are required to submit its audited financial statements annually with the Department of Business Development and the Revenue Department.

For the Revenue Department, the audited financial statements must be submitted with the Corporate Income Tax Return (PND. 50) within 150 days since the end date of accounting period.

For the Department of Business Development, the audited financial statements must be submitted within 1 month since the date of the company’s Annual General Meeting (AGM) or within 5 months since the end of accounting period. Aside from the audited financial statements, updated Shareholders List (BOJ. 5) and Form for submitting Financial Statements (Sor Bor Chor 3) must be submitted altogether.

Failure to submit on time, the company will have to pay penalty to the Department of Business Development and Revenue Department.

Contact MSNA for your business needs particularly on accounting, tax and audit to ensure that you file your taxes and audited financial statements on time.

Thai and foreign companies doing business in Thailand are required to file their Corporate Income Tax returns (Form PND 50) within 150 days from the closing date of their accounting period. Tax payment must be submitted together with the tax returns. The deadline for payment is extended for a few more days if the company is registered with the Revenue Department’s online tax filing system.

In addition to the annual tax filing, any company subject to corporate income tax on net profits is also required to file its Interim Corporate Income Tax Return or Half-Year Income Tax (PND 51). A company is obliged to estimate its annual net profit as well as its tax liability and pay half of the estimated tax amount within 2 months after the end of the first 6 months of its accounting period. The prepaid tax is creditable against its annual tax liability. For example, if the accounting period of the company is on December 31, PND 51 has to be submitted within August of the following year.

MSNA has a team of experienced and knowledgeable accountants who can prepare your accounts and file your taxes efficiently. If you need accounting and tax services, you come to the right place. Contact us now for an initial consultation.

Corporate Income Tax is a direct tax imposed juristic companies or partnerships doing business in Thailand or those that do not do business in Thailand but getting certain types of income from Thailand.

Who are liable for Corporate Income Tax?

The taxable person are as follow:-

1. A company or juristic partnership incorporated under Thai law:
   • Limited company
   • Public company limited
   • Limited partnership
   • Registered partnership
2. A company or juristic partnership incorporated under foreign laws:
   • a company or juristic partnership incorporated under foreign laws and carrying on business in Thailand
   • a company or juristic partnership incorporated under foreign laws and carrying on business in other places including Thailand
   • a company or juristic partnership incorporated under foreign laws and carrying on business in other places including Thailand, in case of carriage of goods or passengers
   • 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
   • a company or juristic partnership incorporated under foreign laws and not carrying on business in Thailand but receiving assessable income under Section 40(2)(3)(4)(5) or (6) which is paid from or in Thailand
3. A business operating in a commercial or profitable manner by a foreign government, organization of a foreign government or any other juristic person established under a foreign law.
4. Joint venture
5. A foundation or association carrying on revenue generating business, but does not include the foundation or association as prescribed by the Minister in accordance with Section 47 (7) (b) under Revenue Code

MSNA group of companies can assist in accounting & tax, audit and filing of the audited financial statements and corporate income tax returns with the Department of Business Development and Revenue Department. We can also help in registering the company with online tax filing system.