At present, the Corporate Income Tax (CIT) rate is 23% for accounting periods beginning between 1 January and 31 December 2012. For accounting periods beginning between 1 January 2013 and 31 December 2014, CIT rate is 20%.

The CIT rates for small and medium enterprises (SMEs) are as follows:

i. For accounting periods beginning between 1 January and 31 December 2012:

Net profit (THB) CIT rate

0 – 150,000 -0-

150,000 – 1,000,000 15%

Over 1,000,000 23%

ii. For accounting periods beginning on or after 1 January 2013:

Net profit (THB) CIT rate

0 – 150,000 -0-

150,000 – 1,000,000 15%

Over 1,000,000 20%

In order to be eligible for the reduced tax rates, the SMEs must meet the following conditions effective from the accounting period which begins on or after 1 January 2012:

(1) The paid-up capital on the last day of any accounting period must not exceed THB 5 million;

(2) The income from the sale of goods and provision of services must not exceed THB 30 million in any accounting period.

On the other hand, banks are subject to CIT at the rate of 10% in respect of profits derived from lending to non-Thai residents from foreign currency funds obtained from non-Thai sources.

Contact MSNA for your Thai accounting and taxation questions.

Further to the duties of a taxpayer summarized in the previous article, today, Thai Tax Expert outlines the rights of a taxpayer in Thailand as follows:

Tax installment payment

For personal income tax, a taxpayer can pay any tax amount which exceeds 3,000 Baht in up to three installments without paying fines or surcharges.

A taxpayer can file a request for an installment payment of tax arrears. However, such payment must meet the requirements set by the Thai Revenue Department.

Application for exemption or reduction of fine and surcharge

A taxpayer has the duty to file his tax return and pay proper taxes on time. Should he fail to do so, he will be subject to fine and surcharge on top of the tax due. However, on some special grounds he may request for exemption or reduction of fine. A tax officer does not have the power under any law to exempt or reduce surcharge. Only in the case where the Director-General grants an extension of the time period of tax payment or remittance and such tax has been paid or remitted within the extended time period, then the surcharge may be reduced to 50% thereof.

Access to documents

A taxpayer has the right to make a copy of his documents relevant to his past tax payment record (tax returns and receipt).

Appeal in dispute of tax assessment

In the case where a taxpayer disagrees with the assessment made by the assessment officer, he has the right to appeal to the Commission of Appeals (in the form P.S.6) within 30 days starting from the day which an assessment notice has been received.

Should a taxpayer disagree with the ruling of the Commission of Appeals, he has the right to appeal within 30 days starting from the day the ruling of the Commission of Appeals has been received. Should he fail to appeal within 30 days, he no longer has the right to appeal and must pay the whole amount of tax, fine and surcharge.

Deferral of tax payment by using collateral for tax arrears

The right to appeal is not a deferral of tax payment.

A taxpayer who receives a tax assessment notice must pay tax on time as stated in the assessment notice. However, should he wish to wait for the hearing or decision of the Commission of Appeals, he has the right to defer tax payment by providing various securities as collateral in accordance with the rules and regulations of the Revenue Department.

Know more about the rights and duties of taxpayers in Thailand. Contact MSNA for Thai accounting and taxation services.

Today, Thai Tax Expert talks about the duties of a taxpayer in Thailand.

A taxpayer is an individual or entity that has the duty to pay taxes and is classified into two:

1. Resident – any individual residing in Thailand for a period or several periods in total of at least 180 days in a tax year (January 1 to December 31) who has a duty to pay tax on income remitted from a source in Thailand as well as on any income from a foreign source in connection with the taxpayers’ employment or business carried on overseas or a property situation overseas and that income is remitted into Thailand within the year that the taxpayer receives that income.
2. Non-resident– the one who is subject to tax only on income from sources in Thailand.

A taxpayer has the following duties:

• File tax returns and pay proper tax
• Register for tax identification number and must also notify the Revenue Department officers of any changes in his particular details
• Pay tax as assessed by the Revenue Department officers on time
• Provide relevant documents and accounts as the law requires. These include receipts, profit and loss statements, Balance sheets, special accounts, etc.
• Cooperate and assist the Revenue Department officers and provide additional documents or information when required as well as comply with the summon

If in any case a taxpayer fails to pay a complete amount of tax, the Revenue Department assessment officer has the right to seize, attach and sell that asset (source of income) by auction even without a court decision and the cash that will be raised from the transaction will be used to pay off tax arrears. Eventually, any taxpayer who does not comply with the law will face civil and criminal action.

Understand better the Thai taxation and know more about your duties as a taxpayer in Thailand. Contact English speaking accountants and Thai tax experts of MSNA for consultation.

In Thailand, certain activities are exempted from Value Added Tax (VAT). These include:

1. Small businesses whose annual turnover is less than 1.8 million Baht;
2. Sales and import of newspapers, magazines and textbooks;
3. Sales and import of unprocessed agricultural products and related goods such as fertilizers, animal feeds, pesticides, etc;
4. Certain basic services such as:

– Transportation services such as domestic and international transportation by way of land;

– Renting immovable properties;

– Educational services provided by the government and private schools and other recognized educational institutions;

– Professional services such as medical and auditing services, lawyer services in court, and other similar professional services that have laws regulation such professions;

– Healthcare services provided by the government and private hospitals and clinics;

5. Services in the nature of employment of labor, research and technical services and services of public entertainers;
6. Goods exempted from import duties under the Industrial Estate law imported into an Export Processing Zone (EPZ) and under Chapter 4 of the Customs Tariff Act;
7. Imported goods that are kept under the supervision of the Customs Department which will be re-exported and be entitled to a refund for import duties;
8. Cultural services such as amateur sports, services of libraries, museums, zoos; and
9. Other services such as religious and charitable services and services of government agencies and local authorities.

Know more about Thai taxation and understand its complexity. Contact MSNA, English speaking accountants and tax experts in Bangkok.

The exporter who wants to become a Registered Exporter and receive certain privileges should submit the Registered Exporter Application Form (SorTor.1) along with the required documents to the following offices:

1. For a company under supervision of Bureau of Large Business Tax Administration can submit the application at Planning and Evaluation Division of the Bureau of Large Business Tax Administration.
2. Other companies can submit the application at Area Revenue Branch Office

2.1 For a VAT registered company located in the jurisdiction of Area Revenue Office within Bangkok area, the application must be submitted at Withholding Tax and Refunds Sub-division.

2.2 For a VAT registered company located in the jurisdiction of Area Revenue Office outside Bangkok area, the application must be submitted at Tax Processing and Refunds Sub-division.

Once the application documents are submitted, the following approval process will take place:

• The Bureau of Large Business Tax Administration or Area Revenue Office (depending on the case), will verify the credibility of the exporter who submitted the Registered Exporter Application Form.
• Then, the opinion will be sent to the Registered Exporter Classification Committee to review and send to the Director of Bureau of Large Business Tax Administration or the Director of Area Revenue Office for approval.
• The Bureau of Large Business Tax Administration or Area Revenue Office (depending on the case) will then notify the result to the exporter.

Interested in setting up an exporting company and become a Registered Exporter in Thailand? ThaiLawyers can help you for company registration, visa and work permit application. MSNA’s Thai Tax Advisors can help you coordinate with the Thai Revenue Department for Registered Exporter application.

The Thai Revenue Department has recently enhanced tax benefits for taxpayers who contribute to provident funds.

Previously, the employees’ income or benefits received upon the termination of their employment due to death, disability, or retirement was tax exempted. The new tax benefit eliminates the retirement requirement whereas if an employment is terminated before an employee turns 55 years old, his/her income or benefits received upon such termination is still exempted on the conditions that such income or benefits remain in the fund until the death or disability of the employee or the employee reaches 55 years of age.

The implementation of tax benefit aims to encourage long-term savings for the provident fund members. When the members have retired or left their job according to the law, any payment or benefits received upon such retirement or employment termination is tax exempted. This will improve the quality of life and promote the equality between members of provident funds and the government pension funds.

Need help on Thai taxes? Contact English speaking accountants and tax experts of MSNA.

A taxpayer who made charitable donations other than to support educational projects may be entitled to a deduction. Such qualified charitable donation must be made to one of the following institutions:

1. Temples
2. Public hospitals
3. Thai Red Cross Society
4. Public or private educational institutions
5. Government agencies (such as for the donation to the nation’s natural disaster victims)
6. Charitable institutions, government employee welfare or funds, etc. as prescribed by the Ministry of Finance

The qualified amount is:

1. The actual amount you donated;
2. The maximum amount is 10% of the amount after deducting allowances and contribution to educational projects.

Need help in filing your Personal Income Tax in Thailand? Contact MSNA for consultation.

There are a few changes being made to the tax laws in 2012, notably the Personal Income Tax rule for married couples.

Previously, Sections 57 Ter and 57 Quinque of the Revenue Code stipulated that if your marriage existed throughout the tax year, you and your spouse must file a joint tax return with the opinion that a wife may select to file her employment income, Section 40(1) income, separately.

However, on 4 July 2012, the Constitutional Court ruled that Sections 57 Ter and 57 Quinque of the Revenue Code are in breach of the constitution. Consequently, those two sections are no longer applicable. Hence, the government passed an Emergency Act to change the rules for married couples as follows:

1. You and your spouse can file a tax return jointly as before, for all types of income or
2. You and your spouse can file a tax return jointly, however either you or your spouse may select to file income from employment (Section 40 (1)) separately from the joint income by using PND.91 tax form or
3. You and your spouse can file separate tax returns for all types of income received and pay personal income tax separately. In the case where certain income cannot be clearly identified as yours or your spouse’s, the following rules shall apply:

• Sections 40(2) – 40(7) income must be proportioned equally between you and your spouse.
• Section 40(8) income can be proportioned equally or as agreed between you and your spouse. When you and your spouse agree on a proportion, you must notify the tax officer and pay income tax on that amount accordingly.

Note: If you and your spouse choose to file tax return jointly as in a) or b), you and your spouse are responsible for any tax payable incurred together. On the other hand, if you and your spouse choose to file tax return separately, each of you is responsible for any tax incurred separately as well.

Contact MSNA for preparation and filing of personal income tax returns in Thailand.

According to Section 4 quarter of the Thai Revenue Code, NOT all foreigners are required to obtain a Tax Clearance Certificate in Thailand. Those who are not required to apply for a Tax Clearance Certificate are as follows:

1. A foreigner traveling across Thailand, or entering or residing in Thailand for a period or period aggregating not more than 90 days in a tax year without earning assessable income;

2. A foreigner as prescribed by the Director-General with the Minister’s approval;

3. A foreigner departing Thailand except for the 3 cases described as required to obtain Tax Clearance Certificate

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

A Tax Clearance Certificate is a certificate issued by the Director-General of the Thai Revenue Department or the Provincial Governor or the delegated authority to a foreigner who is leaving Thailand to indicate that he has already paid taxes or that he has provided a guarantor or securities as guarantee for tax liabilities and tax payable.

According to Section 4 quarter of the Revenue Code, a foreigner leaving Thailand shall apply for a Tax Clearance Certificate in the form prescribed by the Director-General within 15 days before leaving the country, whether or not there is any tax payable.

A foreigner leaving Thailand is required to file an application for Tax Clearance Certificate (Form P.1) and supporting documents if:

1) He is liable to payment of tax or tax arrears before leaving Thailand.

2) He has duty to file a tax return and pay tax on behalf of a company or juristic partnership incorporated under foreign laws and has been carrying on business in Thailand.

3) He has taxable income whether or not in Thailand from being a “public performer” in Thailand. (The word “public performer” means a drama, movie film, radio and television performer, singer, musician, professional sportsperson or performer of any kind of entertainment).

Departing Thailand? Consult with MSNA Tax Advisors to know if you are required to get a Tax Clearance Certificate.