A client recently asked MSNA a question about fines for late filing of tax returns.

I understand that taxes must be filed within the deadline. If the last day of filing falls on a holiday or weekends, does it mean we have to file taxes before the due date? And if we file it after deadline, how much penalty do we have to pay?

Answer:

Yes, you have to file your Thai taxes within the due date. Failure to file tax returns and remit tax within the prescribed due date shall be subject to surcharge and penalty as follows:

I. Surcharge

1. Surcharge is 1.5% per month or a fraction thereof of the tax payable, but in no case shall the surcharge exceed the amount of tax payable for late filing of the following tax returns:

– Personal Income Tax,

– Corporate Income Tax (not including mid-year tax),

– Withholding Income Tax,

– Value Added Tax (VAT), and

– Specific Business Tax (SBT)

2. For Mid-Year Corporate Income Tax, surcharge is 20% of the tax payable or the deficient tax as the case may be.

3. House and Land tax for the year paid after the due date shall be subject to a surcharge of up to 10% if made within four months after the due date. If the tax is overdue for more than four months, the District Officer is empowered to attach the property on which the tax is due for the purpose of selling it by auction and applying the proceeds from sale for settlement of the tax due.

4. Municipal Tax for the year paid after the due date shall be subject to a surcharge at the rate of 10% to 24% of the tax due.

5. Signboard Tax for the year paid after the due date shall be subject to a surcharge at the rate of 10% of the tax due.

6. With regard to Social Security Fund, remittance of the contribution for the month after the due date is subject to a surcharge at the rate of 2% per month of the contribution amount due.

II. Penalties

1. For Corporate Income Tax, the maximum penalty of 200% of the tax due shall be imposed only in the case of tax assessment following the audit by the Revenue Department.
2. For Value Added Tax and Specific Business Tax, penalties will be:
   1. Up to 200% of tax due in case of failure to file a tax return
   2. Up to 100% of the shortfall in the tax due following an inaccurate tax return.

NOTE: The above penalties may be waived or reduced according to the regulation prescribed by the Director-General with the approval of the Minister of Finance.

III. Fine

Failure to file a return will be subject to a fine of not exceeding Baht 2,000.

However, in the event that the deadline of filing a tax return falls on a weekend or an official holiday, you can file and pay taxes on the next working day. This would not be regarded as late filing.

Contact MSNA for your Thai accounting and tax needs. As your tax agent, our well-experienced English speaking accountants will make sure that your taxes are prepared and filed accordingly.

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?

Answer:

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.

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.

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:

Contact English speaking accountants of MSNA for your tax questions and for the preparation and submission of your Thailand personal income tax.

The Thai Revenue Department has recently changed the personal income tax rates for the tax years 2013 and 2014.

If you earned income and taxes were withheld using the progressive rate during the year 2013, when you file your personal income tax return of 2013 whose deadline is 31 March 2014, you will most likely get some tax refund due to the fact that your employer withheld the tax using the rates that were in effect last year.

Here are the new personal income tax rates:

If you need help to prepare and file your Thai personal income tax return, please contact MSNA. We have been providing foreigner income tax service for many years.

In November, we posted an article about the new law regarding tax invoices which previously was to take effect from 1 January 2014. However, on 26 December 2013, the Thai Revenue Department has changed the date to take effect on 1 January 2015.

According to this new law, the tax invoice has to have the items on it as follows:

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.

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.msnagroup.com 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.

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.