There are certain categories of taxpayers and income which are exempt from Corporate Income Tax in Thailand as follows:

1. The categories of taxpayers which are exempt from Corporate Income Tax are as follows:

– Companies which were granted exemption from tax for a period of time by the Board of Investment under the Investment Promotion Act (1977);

– Foreign organizations under mutual agreements or diplomatic organizations.

– Specific foundations or organizations; and

1. The categories of income which are exempt from Corporate Income Tax are as follows:

– A special purpose vehicle (“SPV”) for securitization is granted the tax exemption on income derived from a securitization project approved by the Office of the Securities and Exchange Commission (“SEC”). Nevertheless, the operation and allocation of cash inflow for the settlement of debts and expenses must follow the plan approved by the SEC. moreover, no dividends may be paid to the shareholders of an SPV until all remaining assets and benefits have been transferred by the SPV back to the originator of the securitization project and the SPV ceases to exist.

– Interest on foreign loans paid to financial institutions organized under a specific law and wholly-owned by a foreign government;

– Interest on government bonds paid to a foreign company not carrying on business in Thailand;

– Interest on foreign currency deposits received from a commercial bank used for lending to non-Thai nationals domiciled or residing abroad, foreign companies not carrying on business in Thailand and foreign banks including those with a branch or representative office in Thailand.

– Dividends received from foreign investments are exempt from tax provided that the Thai company receiving the dividends has held at least 25% of the shares with voting rights of the company paying the dividends for a period of not less than six months before the date on which the dividends were received and the dividends were derived from net profits in the foreign country taxed at a rate of not lower than 15%. In the event that a “special law” in a particular foreign country provides a reduced tax rate or exemption for the net profits, the limited company which receives the dividends is still eligible for the tax exemption;

– Dividends or share of profits paid by an unincorporated joint venture to a Thai company or foreign company carrying on business in Thailand;

– Dividends received from a Thai company by a company listed on the Stock Exchange of Thailand. Dividends received by a non-listed company from another Thai company are also exempt from tax, provided that the company receiving the dividends holds at least 25% of the total shares with voting rights without any direct or indirect cross-shareholding. In other cases where one Thai company receives a dividend from another Thai company, one-half of the dividend is exempt from tax. However, in all cases, the listed or non-listed company receiving a dividend must have held the shares in the company paying the dividend for at least three months before and three months after the dividend was received. In the case of an amalgamation (merger) or entire business transfer (EBT), the new or surviving company can include the period of ownership of any predecessor company that was part of the amalgamation or EBT when counting the three-month period;

Contact MSNA for your Thai accounting, taxation and other business needs.

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.

In Thailand, an employee is expected to follow the Employer’s disciplinary measures as follows:

1. He or she must comply with the work rules.
2. He or she must comply and follow a lawful order of a superior.
3. He or she must perform work on the time assigned and make the working time in record.
4. He or she must perform duties with integrity and must not persecute or intend to cause any damage to an employer or other employees.
5. He or she must perform work actively with utmost effort.
6. He or she must follow a regulation on occupational safety.
7. As necessary or as suitable to his/her duty, he or she must maintain machines, tools and equipment to be in a good condition and well keeping.
8. Employees must carefully carry out surveillance and prevention against the potential loss or damage made by a person or other ominous incidents to property in working place or factory compound with full of ability.
9. Employees must keep a workplace or factory compounds clean and clear.
10. He or she must not make a brawl with or an assault against any person in a workplace or factory compounds.
11. He or she must not take illegal drugs, a lethal weapon or an explosive substance into a workplace or factory compound.

In the event of an employee acts against these disciplinary measures, he or she will be warned in oral, warned in writing, suspended or dismissed according to the level of his/her offence. Whereas, an employee allegedly violate the disciplinary measures, the employer may issue a written order of the suspension stating the offence committed and the period of suspension of not exceeding 7 days and notify the employee prior to the suspension.

During the suspension, the employer must pay the employee of not less than 50% of the wages of a working day prior to his/her suspension. Upon the completion of the investigation, if it appears that the employee is not guilty, the employer must pay wages to the employee equivalent to the wages of a working day from the date of suspension. The payment must be included as part of the employee’s wages, plus interest at a rate of 15% per annum.

Know more about your duties as an employer in Thailand. Contact MSNA for Thai Labor Law consultation and related services.

Through its medical hub policy, the Thai government will serve as a facilitator for private hospitals in helping them to improve their medical services to foreign visitors seeking health care in Thailand. Thus, the Thai government ensures that the medical hub policy would not affect the availability of affordable health care for Thai people. The policy involves mainly the operations of private hospitals while government hospitals still focus on medical services for Thai nationals so it should not adversely affect Thai patients and the government would not spend national funds on private hospitals.

The government had recently organized the first workshop for hospitals under the Ministry of Public Health and the Ministry of Education to work together in an integrated manner so that they would optimize the use of existing resources. In the workshop, they discussed the road map to proceed with Thailand’s medical hub policy which also includes the creation of more qualified physicians. More workshops will be held for further discussions on the issue.

Apart from serving as the facilitator, the public sector would help boost the image of the country in terms of medical advances. The medical hub policy would encourage health establishments in Thailand to improve their health services to higher standards. This will enhance the competitiveness of Thailand as a country as well.

In developing Thailand into a regional medical hub, the Thai government will emphasize four areas. In the first area, Thailand will be promoted as a wellness hub with full cycle services. The second area is that the medical service hub will link with spa services and health tourism. The third area aims to turn Thailand into an academic hub for health care. The fourth area aims to develop Thailand into a pharmaceutical and health products center.

Since 2012, the number of medical tourists visiting Thailand is continuously rising. In facilitating their trips to Thailand, the Government has granted visa extension from 30 days to 90 days for nationals of six countries in the Middle East in the initial stage so that they can stay in Thailand for a longer period for medical services. Visa extensions will later be granted to medical tourists from other countries.

More updates on this medical hub policy will be announced later. Visiting Thailand? Obtain a proper type of Thai visa before leaving your country. Contact ThaiLawyers for Thai visa application assistance.

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.

In Thailand, all juristic companies, partnerships, branches of foreign companies and joint ventures are required to prepare financial statements for each accounting period. The financial statements must be audited by and subjected to the opinion of a certified Thai auditor with the exception of the financial statement of a registered partnership established under Thai law, whose total capital, assets and income are not more than that prescribed in Ministerial Regulations. The performance record is to be certified by the company’s auditor, approved by shareholders and filed with the Commercial Registration Department of the Ministry of Commerce and with the Revenue Department of the Ministry of Finance.

Preparation and filing of reporting requirements vary based upon the type of business entity selected such as follows:

For a private limited company

The company director is responsible for arranging the annual meeting of shareholders to approve the company’s audited financial statements within 4 months at the end of the fiscal year and filing the audited statement and supporting documents including a list of shareholders on the date of the meeting to the Registrar no later than 1 month after the date of the shareholder meeting.

For a public limited company

The company director is responsible for arranging the annual meeting of shareholders to approve the audited financial statements of a company within 4 months at the end of the fiscal year. A copy of the audited financial statement and annual report, together with a copy of the minutes of the shareholder meeting approving the financial statement, should be certified by the director and submitted to the Registrar along with a list of shareholders on the date of the meeting no later than 1 month after approval at the shareholder’s meeting. The company is also required to publish the balance sheet for public information in a newspaper for a period of at least 1 day within 1 month of the date it was approved at the shareholder’s meeting.

For a foreign company such as branch office, representative office or regional office and excluding joint ventures

The Manager of the branch office must submit a copy of the financial statement to the Registrar no later than 150 days after the end of the fiscal year. In this kind of set up, approval of the shareholder meeting is not required.

To ensure that your reporting requirements are prepared properly and submitted within the specified deadline, it is essential to have a good and diligent accountant. Contact English speaking accountants of MSNA for your accounting, tax and audit needs.

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.

In line with the ASEAN Economic Community (AEC) which will take effect in 2015, the Thai government aims to become center for Regional Operating Headquarter (ROH) for multinational companies who would like to setup their ROH to expand their operation within the ASEAN region or to prepare itself for the upcoming AEC. Being strategically located within the Southeast Asia region with networks of modern infrastructures, quality skilled labor, easy access to raw materials and attractive tax incentives significantly represent as a cost-effective investment for any companies who want to save costs and at the same time, still remain competitive. Government policies also contribute to Thailand’s apparent strengths in its position as a strategically located business hub and center for production and regional outsourcing.

The Thailand Board of Investment (BOI) act as a focal point for the investors in dealing with different government agencies by bringing together under one roof the representatives from different relevant ministries. The Thailand BOI offers assistance on applications for business licenses, factory certification, environmental impact assessments and many other matters. Besides Regional Operating Headquarter, the Board of Investment of Thailand is also promoting the following related activities with tax and non-tax incentives vary depending on the activities.

• International Procurement Offices, involving sourcing, quality control and packaging
• Trade and Investment Support Offices
• International Distribution Centers
• Distribution Centers
• Research and Development

For investors who are interested in establishing the Regional Operating Headquarter in Thailand, please visit the BOI’s website www.boi.go.th for more details on incentives and conditions in setting up a ROH. Need further assistance in setting up Regional Operating Headquarters and other business forms in Thailand, contact English speaking ThaiLawyers for business registration, license application, visa and work permit services.

The ASEAN Disclosure Standards Scheme is one of the capital market initiatives undertaken by the ASEAN Capital Markets Forum (ACMF) under its regional capital market integration plan (Implementation Plan) endorsed by the ASEAN Finance Ministers in April 2009 in Pattaya, Thailand. The Implementation Plan was developed to promote the development of an integrated market to achieve the goals of the ASEAN Economic Community (AEC) Blueprint 2015 to form an integrated ASEAN market by 2015.

This Scheme aims to facilitate cross-border offerings of securities within the ASEAN region by harmonizing disclosure requirements and support fund-raising activity. It will also benefit ASEAN and non-ASEAN issuers who make multi-jurisdiction offerings of equity and plain debt securities within ASEAN by increasing efficiency and reducing costs. Under this Scheme, when an issuer wishes to make a multi-jurisdiction offer of securities, the issuer needs to provide only a single set of disclosure documents that comply with the ASEAN Disclosure Standards to investors in each jurisdiction.

The Scheme also bring ease and cost savings to all issuers who make multi-jurisdiction offerings of plain equity and debt securities that require the registration of prospectuses or registration statements within ASEAN. Under the framework, issuers will be required to comply with a set of common disclosure standards, known as the ASEAN Disclosure Standards which are based on standards on cross-border offerings set by the International Organization of Securities Commissions (IOSCO).

Further details of the ASEAN Disclosure Standards Scheme and Implementation Plan are available on the ACMF website at www.theacmf.org. Interested to invest in Thailand, contact MSNA for your business needs.