Small and medium enterprises in Thailand with fixed assets but not including land, with a value of no more than Baht 200 million and with no more than 200 employees, are entitled to the following special depreciation methods:

1. Machinery and equipment may initially be depreciated at 40% of cost and the remaining balance will be depreciated at the maximum rate of 20%.
2. Computer hardware and software may initially be depreciated at 40% and the remaining balance will be depreciated within three accounting periods.
3. Factory buildings may initially be depreciated at 25% and the remaining balance will be depreciated at a maximum rate of 5%.

SMEs with a paid-up capital at the closing date of the accounting period of not exceeding Baht 5 million and earning income from the sale of goods or provision of services of not exceeding Baht 30 million during the accounting period are entitled to depreciate machinery acquired during the accounting period are entitled to depreciate machinery acquired during the period from 1 January 2012 to 31 December 2013 at 100% of cost.

Contact MSNA for your Thai accounting and tax questions.

Today, we talk about the penalty and surcharge for late filing of personal income tax returns or in the event of wrong declaration of tax in the returns.

A penalty is imposed to a taxpayer by the assessment officer in the event of filing a wrong return or failure to file the return. The rate of penalty is 100% in the case of an inaccurate return and 200% for failure to file a return. The penalties may be reduced by 50% if the taxpayer submits a request in writing and the assessment officer is of the opinion that the taxpayer did not intend to evade tax and cooperated with the officer during the tax audit.

Hence, any person who fails to pay or remit tax within the due date is liable to pay a surcharge of 1.5% per month, or fraction thereof, of the amount of tax to be paid or remitted subject to a maximum equal to the amount of tax to be paid or remitted.

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

When we have a branch office in Thailand, are we liable to pay taxes to the Thai government on overall income?

Answer:

No, branches of foreign companies in Thailand are liable to pay income tax at the normal Corporate Income Tax rate on locally earned income only. Hence, branch incomes that are remitted to the head office overseas are subject to an additional tax of 10%.

Branches of foreign commercial banks however are exempt from this tax in respect of their profits derived from the “out-out business”.

Contact MSNA for your Thai accounting and tax questions.

Today, we talk about the first step of the company registration process, the corporate name reservation.

To reserve a name, the company can either submit a signed Name Reservation Form (one of the promoters is required to sign in such form) to the Department of Business Development of the MOC or fill in a Name Reservation Form and submit it through the Department of Business Development’s website.

The promoter is required to provide the requested company name together with two alternative names. The registrar will then examine the application in order to ensure that:

(a) No similar company name have previously been reserved; and

(b) The names do not violate any ministerial rules

If the applicant’s preferred name is in conflict with either of the above, that name will be rejected and the registrar will consider the two alternative names submitted. This process can normally be completed within 2 to 3 working days. If all three names submitted are rejected, the applicant will be required to re submit the form with 3 new names.

The registrar has considerable discretion with regard to the matter of company names. Oftentimes, the first name or even the first two names are rejected due to the violation of one of the two rules stated above. Once the name is approved, the corporate name reservation is valid for 30 days, with no extensions. However, after the name has expired, the promoter can still re apply for Name Reservation again and again if the name is still available.

We will talk about the next steps of the company registration process in the succeeding articles. Contact ThaiLawyers for company registration in Thailand.

Question:

I have just extended my non-B visa and got a new permit of stay until next year. However, I lost my passport recently and no one has ever contacted my Embassy here in Bangkok to return it so I consider it gone. Can I apply for a new passport but can I have it stamped at the Bangkok Immigration with the same permit of stay? I will appreciate any feedback. Thanks.

Answer:

Yes, you can get the same stamp but first, you have to report of lost passport at the nearest Police Station and obtain the Police Report document. Then, you should contact your Embassy in order to get a new passport. After obtaining the new passport, you must bring it together with the Police Report to meet with the Immigration official in order to obtain a copy of entry stamp, non-B visa and stay permit in your new passport.

Lost your passport in Thailand? Contact the Thai lawyers of MSNA for assistance in obtaining a police report of lost passport and getting the Immigration stamps on your new passport.

Under Section 3 of the Permitted Activities of the Board of Investment, activities for Light Industry are as follows:

3.1 Manufacture of textile products or parts

3.1.1 Manufacture of natural or synthetic fibers

3.1.2 Yarn spinning

3.1.3 Manufacture of fabrics

3.1.4 Bleaching, dyeing and finishing

3.1.5 Printing and finishing

3.1.6 Manufacture of garments

3.1.7 Manufacture of parts or accessories for garments

3.1.8 Manufacture of household textiles

3.1.9 Manufacture of carpets

3.1.10 Manufacture of trawling nets

Conditions

1. Bleaching, dyeing and finishing project must be

1.1 Located in an industrial estate specified by the Industrial Estate Authority of Thailand or promoted industrial zones which have waste elimination systems and environmental conservation according to legal standards

1.2 Only the promoted companies that plan to expand the project in the existing location must obtain ISO 14000 certification within 2 years from the start-up date.

Rights and benefits

1. Shall be according to the Board of Investment Announcement No. 1/2543 dated August 1, 2000
2. Projects located in industrial estates for integrated production of the textile (except Bleaching, dyeing and finishing) shall be granted:

2.1 Exemption of import duty on machinery, regardless of zone

2.2 Exemption of corporate income tax for:

(1) Five years if located in Zone 1

(2) Seven years if located in Zone 2

(3) Eight years if located in Zone 3

2.3 Other rights and benefits shall be granted according to the BOI Announcement No. 1/2543 dated August 1, 2000

1. Only the manufacture of functional fiber and functional yarn shall be classified as a priority activity.
2. Bleaching, dyeing and finishing projects that are located in an industrial estate specified by the Industrial Estate Authority of Thailand and industrial estates for integrated production of the textile shall be granted:

4.1 Exemption of import duty on machinery

4.2 Eight-year corporate income tax exemption

4.3 Other rights and benefits shall be granted according to the BOI Announcement No. 1/2543 dated August 1, 2000.

Contact ThaiLawyers for BOI application, Thai company registration and visa and work permit application.

Why do we have to maintain our accounting even though our company is in dormant status?

Answer:

Even though your Thai company looks inactive, you have to pay rent and service fees to vendors, like MSNA or the contractors. You will have to withhold taxes and submit them within 7^th of the following month. Also once you are in the VAT system, you will have to file the VAT return every month. And when you have any transactions at all, you will need to talk to MSNA experts to give you guidance and advice. It is in your best interest to deal with a professional accounting firm who can communicate with you very well, like the English speaking accountants of MSNA.

Contact MSNA for your Thai accounting and taxation needs.

In Thai personal income tax computation, there are several types of income that the taxpayer shall not include or may not choose to include such income to the assessable income.

1. Income from sale of immovable property

A taxpayer shall not include income from sales of immovable property acquired by bequest or by way of gift to the assessable income when calculating personal income tax. However, if the sale is made for a commercial purpose, it is essential that such income must be included as the assessable income and be subject to personal income tax.

2. Interest income

The following forms of interest income may at the taxpayer’s selection, be excluded from the computation of PIT provided that a tax of 15% is withheld at source:

a. Interest on bonds or debentures issued by a government organization;

b. Interest on saving deposits in commercial banks if the aggregate amount of interest received is not more than 20,000 Baht during a taxable year;

c. Interest on loans paid by a finance company;

d. Interest received from any financial institution organized by a specific law of Thailand for the purpose of lending money to promote agriculture, commerce or industry.

3. Dividends

A taxpayer, who resides in Thailand and receives dividends or shares of profits from a registered company or a mutual fund which tax has been withheld at source at the rate of 10%, may opt to exclude such dividend from the assessable income when calculating personal income tax. However, in doing so, taxpayer will be unable to claim any refund or credit.

Contact MSNA for your Thai accounting and tax questions.

In forming a company in Thailand, company promoters are responsible for registering the company with the Ministry of Commerce (MOC). The promoters must be individuals, not juristic persons and must be available to sign documentation during the registration process.

For a private limited company, there must be a minimum of 3 promoters and at least 15 promoters for a public limited company. The promoters of a private limited company must be 12 years of age or older while for a public limited company, the promoters must be 20 years of age or older.

Each promoter of a private limited company is required to be among the company’s initial shareholders immediately after the company’s registration and is required to hold a minimum of one share upon the company’s registration. They are generally free to transfer those shares to existing shareholders or third parties, thereafter, if they wish. It is not required for the individuals serving as promoters to reside in Thailand.

The promoters of a public limited company must also be among the company’s initial shareholders immediately after the company’s registration. All promoters must subscribe for shares, which must be paid up in an aggregate amount equal to or not less than five percent of the registered capital. Said shares may not be transferred before the expiration of 2 years from the date of the company’s registration, unless specifically approved at a meeting of shareholders. Nevertheless, it is required that one-half of the individuals serving as promoters have their domicile in the Kingdom of Thailand.

Promoter’s potential legal liability is generally limited to the par value of the shares they will hold after registration is completed. The promoters are also responsible for paying expenses associated with the company’s registration. After registration, however, the company may choose to reimburse the promoters for those expenses.

Interested in forming a company in Thailand, contact ThaiLawyers for more information.

Question:

We are selling domestic animal feeds and decided to put up a signboard just outside our shop. Are we liable for any taxes? Please advice.

Answer:

Yes, in Thailand, owners of signs or billboards, which display a name, trademark or product to promote, advertise or provide information about a business, are subject to the annual signboard tax. The rate of tax varies according to the size of the signboard and the language written on the board.

Owners of signboards are required to file signboard tax return (Phor Phor 1) with the Revenue Department office in your area on or before 31 March of each year and tax must be paid within 15 days from the date of:

1. The installation of such taxable signboard after March of each year;
2. The changes made to the existing signboard;
3. Receipt of an assessment order.

An appeal against the assessment order may be filed within 30 days.

In case of failure to file a tax return, a surcharge at the rate of 10% to 24% of signboard tax payable will be imposed.

Contact MSNA for your Thai accounting and tax questions.