Taxpayers in Thailand are allowed to hire or use a tax agent to file online tax returns, pay any tax dues at the time of filing, or perform any other duties as prescribed by law.

A tax agent can be an individual or a juristic person registered under the Thai law that meets the criteria of a “tax agent” under the Notification of the Revenue Department.

The roles and responsibilities of a licensed tax agent are summarized as follows:

1. Prepare tax returns and file them online at the Revenue Department official website www.rd.go.th with a tax agent’s username and password;
2. Pay the tax due (if any) through electronic payments or Pay at Post;
3. Submit an electronic amendment form to the list of currency tax agent clients (T.T.04) within 15 days since any change in the list is occurred, i.e. getting a new client or removing a client;
4. Update any changes in the registration information of a tax agent to the Revenue Department, e.g. office address, new branches, registered capital, paid up capital or any other similar changes;
5. Enroll in tax seminars, workshops or training courses as specified in the law.

Need help from English speaking tax agents in Thailand; contact MSNA for Thai accounting and tax services.

From the day the company has registered in the VAT system of Thai Revenue Department, the company director and the staff member have to always ask for an official receipt from the vendor when buying goods or services for company’s use otherwise, such expense cannot be used to reduce the company’s profit and may end up having to pay more tax. Even when buying goods or services from individuals (who are not companies), they still can issue a receipt or some kind of documents to prove that they received money from the company director or staff member. In this way, the company can have legitimate receipts that are tax deductible.

When asking for an official receipt, if the vendors (companies or individuals) are registered in the VAT system, they normally will ask to charge 7% VAT and because they charge VAT, they will also have to issue a tax invoice for you. It is important to know the information about Thailand VAT and tax invoice.

The company also needs to withhold taxes from vendors. Please read this article about withholding taxes from vendors for better clarifications.

Contact www.msna.co.th for your Thai accounting, taxation and other business needs.

The new law regarding tax invoices will take effect from 1 January 2014. According to this new law, the tax invoice has to have the items on it as follows:

1. Under the address and contact number of the company, one must add:

– Headquarters (or in case of a branch office in Thailand, has to add the branch number too so that it can be specified whether the head office or the branch office is the one who issues the tax invoice.)

– Tax ID number, which should be near the company name and address) is the same number as the company’s registration number.

2. Under the address of the customer, add:

– ( ) Headquarters ( ) Branch Number………………..

– Tax ID No.: …………………………………

This is because when a tax invoice is issued to a company in Thailand, the issuer will have to check mark to indicate if the buyer of the goods/service is the headquarters or the branch of that company and need also to specify their Tax ID number which is the same as their company registration number.

Reminder if you are the customer:

From 1 January 2014, when you get a tax invoice from a vendor, please make sure you see their Tax ID number and that they specify headquarters or branch number near their company name on top of the tax invoice. Also, near your company name and address, it must specify headquarters (or branch) and your company’s Tax ID Number.

Know more about this new law regarding tax invoices and Thai taxation related matters. Contact MSNA for your accounting, tax and other business needs.

Today, we got a question from one of our accounting clients whom we also assisted in getting BOI promotion for their software business in Thailand.

Question: As you may have already known, our sister company (which is not BOI promoted) has proposed to develop an application that will enable users to download e-books in exchange for payment on a monthly basis. Would this activity be considered as sales of goods which I believe are VAT-exempt or will this be qualified for zero rate VAT in case our customer downloaded and used the e-book abroad.

Answer:

We verified it with the Thai Revenue Department and according to them, downloading of e-books is not categorized as sales of newspaper, magazine and textbook but it should be treated as a service which is subject to VAT. Hence, the zero rate VAT applies if such service is used overseas.

Contact MSNA, English speaking Thai accountants for your Thai accounting and tax questions.

Today, we got a question from one of our accounting clients.

Question:

We registered the company into the VAT system because I need it for my work permit application. However, are we obliged to charge VAT even though we only do export activities in Thailand? If so, what rate? Please advice.

Answer:

Under the value-added tax (VAT) system of Thailand, you are allowed to export goods and services tax-free, in short; you are entitled to a zero VAT rate. This means that you are not required to charge VAT and therefore, can claim back the input VAT (VAT that you paid). However, it takes time before you can refund your VAT because the Revenue Department usually does VAT audits to ensure that your claim is true and each transaction paper qualifies as an “export” activity per Thai VAT law.

Contact MSNA for your Thai accounting and tax questions.

Today, we got an inquiry from one of the avid readers of our articles.

Question:

Hi, I’m an Asian and one of the foreigners working in Thailand. I have a valid non-B visa and Thai work permit with my employer company which submits my monthly tax and social security contribution to Thai authorities. My question is about my Personal Income Tax particularly the certain types of allowances that I can use as exemption to compute my taxes. Although I am still single at the moment, I have my aging parents back home whom I support financially every month. Can I use parents allowance for the computation of my Personal Income Tax?

Answer:

First of all, thank you for your inquiry. To answer your question, parents allowance is one of the types of allowances that are allowed for the calculation of Personal Income Tax. However, it only applies to Thai citizens. Unless your parents have obtained Thai national ID card and become Thai citizens, you cannot use parents allowance as exemption for your Personal Income Tax. Thus, if you got married and have children, you can use spouse allowance and child allowance regardless of their nationality and whether they stay with you in Thailand or in another country.

Know more about types of exemptions that are allowed for the calculation of Personal Income Tax. Contact MSNA for the computation, preparation and submission of your Personal Income Tax Returns in Thailand.

What is double taxation? How to avoid its effects to individuals and business entities?

Answer:

Double taxation is a case where tax is being levied twice from the same amount of income in two or more states, e.g. Thailand and other countries.

In order to avoid or eliminate double taxation, Thailand has entered into Double Taxation Agreement with other countries. Currently, Thailand has agreement with 55 countries whereas both residents of Thailand and the contracting states will benefit from the agreement.

In a double taxation agreement, there are credit and exemption methods. It also covers taxes on income and capital of individuals and juristic entities as well as the petroleum income tax. The petroleum income tax and the local development tax (i.e. Property tax) are covered under some treaties but Value Added Tax, Specific Business Tax and Municipal Tax are not covered under any tax treaties.

Thai double taxation treaties generally place a resident of the Contracting State in a more favorable position for Thai tax purposes than under the domestic law, i.e. the Thai Revenue Code. Thus, in the event that the rate of tax stipulated in the Revenue Code is different from that of a double taxation agreement, the rate which is more beneficial to the taxpayer will be applied.

Thai double taxation treaties in general provide income tax exemption on business profits (industrial and commercial profits) earned in Thailand by a resident of a Contracting State if it does not have a permanent establishment in Thailand. Moreover, the withholding taxes on payments of income to foreign juristic entities not carrying on business in Thailand may be reduced or exempted under the double taxation treaties.

Contact MSNA for your Thai accounting and tax questions and other business needs.

Today, Thai Tax Expert answers a question from one of our accounting clients.

Question:

Our Thai company issues Purchase Order to a company overseas but everything will be manufactured in Thailand. In this instance, there will be invoice from overseas company to our Thai company but there will be no physical documentation of shipment from overseas to Thailand. Do we need to pay taxes in Thailand? What are the taxed and tax rates involved?

Answer:

Normally when you buy goods for use or sale in Thailand from an overseas supplier, you will have to import it and pay 7% VAT at the Customs.

In your case, because the goods will be produced in Thailand and sent to you domestically, you will have to submit to the Thai Revenue Department 7% VAT with Form PP.36 within the 7th of the following month. This is to pay VAT on behalf of your overseas vendor. This VAT becomes your input VAT in the month that you submit it and it will be used to offset the Output VAT that you have to submit normally. If your company is not VAT registered, you will still need to submit Form PP.36, but you will not be able to use that VAT. It becomes part of your product cost.

And the producer in Thailand should invoice your overseas vendor for the price of the product plus 7% VAT. However, it will be your concern whether or not they treat the transaction correctly.

Contact MSNA for your accounting, tax and other business needs.

The Thai Revenue Department has created the strategy of tax collection to handle a new challenge in order to enhance efficiency of tax administration.

The Thai Revenue Department has adopted a risk management principle, known as Compliance Risk Management or CRM, as a tool in the management of tax collection. The principle of CRM is to assess and classify taxpayers according to their credibility. If the taxpayers are classified in the “high-risk” group, tools will focus on law enforcement such as penalties and tax audits. And if the taxpayers are classified in “low-risk” group, the Revenue Department will focus on providing these taxpayers with services such as counseling and facilitating.

From this kind of management, both taxpayers and the Revenue Department are likely to benefit. As a result, this measure will reduce costs involved in tax collection and bring out good attitudes throughout all parties concerned. In fact, Revenue Departments in many countries have already adopted and implemented the CRM’s principles and they were satisfied with an increase of tax collected.

Implementation of the new strategy to enhance efficiency of tax administration is yet to be announced by the Thai Revenue Department. Contact MSNA for your Thai accounting and tax questions.

Foreign companies carrying on business in Thailand, whether as a branch or an office must apply for tax identification number from the Revenue Department. An application form (Lor Por 10.3) together with other relevant documents such as a copy of the company’s registration license, house registration, etc., shall be submitted to the Area Revenue Office within 60 days from the date of registration or operation.

Moreover, all companies whether a Thai or foreign which carries on business in Thailand must submit the corporate income tax returns and payments twice a year:

1. The half year tax return must be submitted (Corporate Income Tax PND 51 form) within two months after the end of the first six months. The amount of tax due shall be half of the entire year projection of the company’s annual net profit.
2. The annual tax return (Corporate Income Tax PND 50 form) must be submitted within 150 days after the closing date of its accounting period.

Contact MSNA for further assistance in filing your half year corporate income tax return and annual corporate income tax return in Thailand.