We got asked a lot of times about the difference between being a tax resident and a non-tax resident in Thailand when filing the Thai personal income tax returns.

Taxpayers in Thailand are classified into resident and non-resident. A tax resident is any person living in Thailand for a period of more than 180 days in any tax calendar year. A tax resident of Thailand has the duty to pay tax on income from sources in Thailand as well as on the portion of income from foreign sources that is brought into Thailand.

However, there are cases where foreign-based income is not subject to Thailand taxes even if the taxpayer is a tax resident of Thailand.

A non-tax resident on the other hand means any person not living in Thailand but has income from sources in Thailand. He/she has the duty to pay tax only on income sourced in Thailand.

Contact MSNA for assistance in filing your Thai personal income tax returns in Thailand.

For real estate properties in Thailand, the Department of Lands has set its criteria for payment of Specific Business Tax as follows:

1. The term “sale” for specific business tax collection includes agreements to sell, sales with buy-back, exchanges, gifts, hire-purchase agreements, or transfers, with or without compensation.
2. The following types of registered real estate transactions are considered as sales for commercial or profit-making purposes and are subject to specific business tax:
   1) Sale of real estate by those with a license for land allocation under land allocation control laws.
   2) Sale of condominium units by business operators who registered the building in accordance with the Condominium Act.
   3) Sale of buildings constructed for sale, including the land on which such building stands.
   4) Sale of real estate that does not fall under (1), (2), or (3), specifically in cases where it is divided or separated for sale for making roads or other public utilities or promise to provide such things.
   5) Sale of real estate held by corporations or juristic persons for business purposes as per Section 77/1 of the Revenue Code.
   6) Sale of real estate not covered under (1), (2), (3), (4) or (5) if the sale occurs within five years from the date of acquisition of such real estate.
3. Registration of sale of real estate that is not subject to specific business tax is as follows:
   a. Sale not covered under item 2 and occurring more than five years from the acquisition date of the real estate.
   b. Sale or expropriations under real estate expropriation laws.
   c. Sale of inherited real estate.
   d. Sales of real estate used as the primary residence, with the seller listed on the house registration for at least one year before the sale. If land and building were acquired at different times, the five-year period applies to the latest acquisition. For instance, if foreigners have their names in the yellow house registration book for more than one year, they will not need to pay the 3.3% specific business tax, similar to Thai people)
   e. Transfer of ownership or possession of real estate to biological children (excluding adopted children) without compensation.
   f. Inherited property transfers to legal heirs or will beneficiaries who are legal heirs.
   g. Transfer of ownership or possession of real estate to government agencies or government organizations without compensation as per Section 2 of the Revenue Code.
   h. Exchange of ownership or possession of real estate with government agencies or organizations under Section 2 of the Revenue Code, where no compensation other than real estate exchange is given.
4. Sellers of real estate are required to pay specific business tax at a rate of 3.3% based on either the appraised property value for registration fee purposes under the Land Code or the actual sale price, whichever is higher.

MSNA group of companies can assist you in property acquisition and taxation matters. Contact MSNA for your tax concerns and Thai Lawyers for buying properties in Thailand.

The government has recently issued a Ministerial Regulation to amend the assessable income tax rates that are exempt from being included in the computation of income tax for severance pay received by employees under the Labor Protection Act in consideration of rising inflation rates and the general consumer price index, which will alleviate the income tax burden for employees who have been laid off.

The Ministerial Regulations no. 394 (B.E. 2567) issued under the Revenue Code on Tax Exemptions was published in the Royal Gazette on July 17, 2024 shall apply to assessable income received from 1 January 2023 and onwards. The compensation received by an employee under the Labor Protection Act, but does not include compensation received by an employee due to retirement or termination of employment contract. This shall include compensation not exceeding the wages for the last 400 days of employment, but not exceeding Baht 600,000.

Need help with your personal income tax filing in Thailand? Contact MSNA for further assistance.

Recently, we registered a company engaged in export business. They asked us how they can claim back the VAT that they will pay. This is our answer.

Once the company is registered in the VAT system and you buy anything, please always remember to ask the vendors to issue a Tax Invoice in the company name with the correct address. 

At month end, your accountant will gather all the tax invoices issued by your vendors and make an input VAT report and the accountant will also gather all your tax invoices that you issued to make an output VAT report. Then the difference of the VAT amounts (the input VAT in excess of the output VAT) will be claimed back from the Revenue Department through these methods:

1. You roll forward the excess VAT amount to the following months until you have a big enough amount then you click to claim the big amount at once.

2. You click to claim back the excess VAT amount every month.

Note that the Revenue Department will ask for so many documents to make sure that all the VAT you claim back is legitimate, so we suggest not to claim back every month. Some companies do it every quarter of every half year. You can engage MSNA group to do your accounting and tax filing. We can also meet with the Revenue Department on your behalf, if necessary. However, we cannot help to speed up the VAT refund process.

Can tourists buy a condo in Thailand? Yes you can. However, when foreigners buy a condo, they need to send the purchase money from overseas. The Land Department needs the evidence of your foreign money transfer to process the registration of the change in the ownership. However, normally banks will not open a bank account for a foreign tourist. How can tourists by a condo in Thailand if they do not have a bank account here? You need to send your money to Thailand to your bank account because your bank needs to issue a letter to the Land department certifying that you sent the purchase money into Thailand. What to do?

You will have to contact your country’s embassy in Thailand to issue a letter to the bank. The letter should mention that the embassy certifies your passport, that you are a citizen of that country and that they request the bank to open a saving account for you.

Depending on the bank, to open an account for you, they may ask for a residence certificate in addition to the letter from your embassy. A resident certificate is issued by the immigration office in the province where you can provide an address that is not a hotel.

When tourists buy a condo in Thailand, it is prudent that they consult with an expert like ThaiLawyers so they can be sure that the sale and purchase agreement is legal, fair and in line with the normal practice in Thailand. We will help guide you through the process while protecting your interest. If you cannot be at the Land Department to do the title deed transfer, ThaiLawyers can represent you and make sure you become the new legal owner of the condo in Thailand.

Contact MSNA group for your next real estate transaction in Thailand. We may even refer you to the best and most reliable agents who will protect you and not the other side.

In accordance to the Revenue Code Amendment Act (No. 53) B.E. 2564 of the Revenue Department, non-residents or foreign online service providers and online platforms who earned more than THB 1.8 million per year from providing online services to non-VAT registered customers in Thailand must register for VAT, submit VAT returns and pay VAT by computing output tax without deducting input tax starting from 1 September 2021. Hence, the online service providers and online platforms are not required to issue a tax invoice or keep an input tax report.

Online services refers to service including incorporeal property which is rendered over the Internet or any other online network services that is impossible to deliver without information technology. Examples of online services includes:

• Digital products such as mobile applications
• Software programs
• Digital images, videos and financial data
• Digital music, films and games
• Distance teaching via pre-recorded medium such as online courses
• Electronic data management such as website supply, web-hosting, automated and digital maintenance of programs
• Providing or supporting a business or personal presence on an electronic network
• Search engine such as customized search-engine services
• Listing services for the right to put goods or services for sale on an online market or auction house
• On-demand streaming services where there is no interaction with the content provider
• Advertising services on intangible media platform
• Support services performed, via electronic means for arranging and facilitating the completion of transactions which may not be digital in nature such as commission fees to intermediaries, service fees to consumers and merchants for sale of products through the online marketplace

Meanwhile, the following are not categorized as an online service:

• Telecommunication services
• Payment channel or money transfer services
• Electronic voucher delivered to the customer by email or SMS to be redeemed for a meal, a hotel stay or a theme park entrance
• Live teaching services whereas the content of the course is delivered by a teacher over the Internet or an electronic network
• Professional services involving human intervention and the nature of which is not essentially automated such as consulting services where advice from the consultant is communicated via email or video call.

On the other hand, online platform refers to market, channel or any other procedures that service providers use to deliver their services to the customers. It serves as an intermediary between the service providers and customers and facilitates the service transactions. It can be in the form of website, mobile applications or other channels.

Such online service providers and online platforms are required to register in the Simplified VAT System for E-Service (SVE). This system allows users to register for VAT, file VAT returns, and pay VAT and request for VAT refund electronically.

Make sure you are filing Thailand taxes correctly. Consult with MSNA’s Thai tax experts now.

The authorized directors of the company can open a business bank account for their company in Thailand right after they have registered the company. At MSNA Group, we are asked about credit card application for the company very often. In this post, we talk about opening a credit card account for business owners who are non-Thai nationals.

The conditions and requirements for the business owner to apply for a credit card depends on the issuing banks where they want to submit their application. In general, a business owner must provide the following:

1. A copy of valid passport with visa and work permit
2. Company registration documents
3. Company Affidavit updated not more than 3 months from the date of application
4. Shareholders list updated not more than 6 months from the date of application
5. Personal Thai bank account statements updated from the last 6 months
6. Company bank statements updated from the last 6 months

Thus, a foreigner can apply for a credit card under the company provided that he has obtained a visa and Thailand Work Permit to work as an authorized director of the company. ThaiLawyers are expert in registering a company, opening a corporate bank account and assisting in business credit card application. Contact us now for your best options.

Opening a restaurant in Thailand

You might already thought about opening a restaurant in Thailand to contribute your unique taste in the “Kitchen of the World”. Well, that’s a good idea, but here are some pitfalls you should wonder about.

No matter what type of business you are attempting to run, Thai company registration laws apply to you and vary depending on your type of business.

The bad news that you can’t just easily and legally run a 100% foreign owned restaurant in Thailand, because  the bar and restaurant ownership in Thailand is subject to the rules and regulations contained within the Foreign Business Act.

The only one way is to find Thai partner who you can trust and open a Thai company. That means the majority of shares in this company must be owned by that Thai citizen. And you as a foreigner can only own up to 49% of that company. This limit can be exceeded or exempted for certain business activities, if a Foreign Business License is granted, but not in this case.

The process of opening a restaurant in Thailand

The process begins with reserving the name of the company with the Department of Business Development. You have to submit a minimum of three company names which follow current ministry regulations. The DBD will choose then one out of the three.

Next, the promoters must file a Memorandum of Association with the Commercial Registration Department. If you are going to have foreign workers, some requirements must be met:  2 million baht minimum registered capital and 4 Thai employees per one work permit for foreigner.

After filling a Memorandum of Association directors should submit an application within 3 months to register the company.

Once registration is finished, the company can begin the process of getting business licenses and start the operation of its new business. For restaurant, you have to get food license from FDA Thailand as well as alcohol license, in case you want to sell beer and other sprits.

If you have personal questions, don’t hesitate to contact ThaiLawyers – qualified English speaking lawyers that can help you to go through entire process of registration step by step.

Today we got a question about making payment to a Singapore company from Thailand. The invoice is for research services rendered in Singapore for use in Thailand. For this we look into the double taxation treaty between Thailand and Singapore. The vendor does not have a permanent establishment in Thailand, so in this case Singapore, not Thailand, should get the tax from the business profits. Therefore when the Thai company makes payment to the Singaporean company, it does not have to withhold tax to submit to the Thai Revenue Department.

The next thing to really consider is whether the Thai company has to submit VAT on behalf of the Singaporean company. Since the research services were rendered in Singapore and the result of the work was to be used in Thailand, VAT must be submitted with Form PP36 by the 7^th of the month following the payment. If the Thai company is VAT registered, it can use the receipt of PP36 as one of its input tax invoices and claim back the amount of VAT in the Form PP30 of the same month as PP36 submission.

Looking for a great team of Thai accountants who speak fluent English at reasonable prices? Contact us today.

Here we want to talk about writing off debts by companies which can happen when the creditors are related to the company (shareholders, group companies, etc). Thai accountant should know how to treat writing off debts by companies on the accounting books. You have to recognize the amounts as the company’s income. They are part of the profit to calculate corporate income tax for the year.

When you are closing down a Thai limited Company, most likely the company still has liabilities in its accounting books. You need to send a registered mail to each creditor to let them know you have decided to close down. This is so that if they have money owed by the company, they will know where to contact the liquidator. If you do not pay any of the debts, it will become an income. The treatment is the same as writing off debts by companies.

Do you need to pay VAT on the income recognized from writing off debts? Thai Tax Law does not impose VAT on revenue from forgiven debts as it is not compensation from selling goods or services. To summarize, when writing off debts by companies, you need to consider how much corporate tax the company will pay. In case of closing down the company, if you choose to leave the liabilities on the books, the Thai revenue department will make you recognize them as incomes which may make the company have a profit, thus pay tax, anyway.

For accounting, audit, closing down companies, etc., contact MSNA Group now.