Staffing can be described as the recruitment, careful selection, development and providing proper compensation of personnel to perform their assigned roles in the workforce. Staffing solutions’ main purpose is to achieve the supply of skilled and qualified candidates and meet the organization’s business plans and visions. Thus, continuous staffing is essential for a business organization due to the promotions and career moves that occurs.

As part of MSNA’s services, we are assisting our clients by providing innovative solutions in building their productive accounting team.

We can provide, if required, on-the-job training for selected candidates and focus
on the essence of awareness, competence and professionalism in the areas of bookkeeping, accounting, audit, taxation and English communication in becoming an effective Accounting staff and Accounting Managers to meet the client’s needs and
expectations.

In some cases, prospective candidates will be screened and recommended through the following procedures:

1. Selection of possible candidates

2. Initial interview in Thai and English

3. Evaluation of ability and skills

4. Reference and background check

5. On the job training, if required by the client

6. Introduction to English communication skills (depending on client’s preference)

7. Assessment of over-all performance

8. Recommendation

For your accountant staffing needs, please contact MSNA to know more details on how we can help you.

When your business in Thailand cannot collect a debt from a debtor, if you want to write it off from your books, there are some rules prescribed by the Thai tax laws to follow. If you write it off not following the rules, the amount of the debt written off will be classified as a non-tax deductible expense, which means that it is your company’s expense but needs to be added back to the bottom line profit before calculating income tax on your corporate income tax return.

The Ministerial Regulation No. 186 (1991) defines Bad Debts that are eligible to be written off and the procedure to write them off as follows:

The Bad Debts that can be written off from the company’s accounts must have these characteristics:

(1) The debts arose from carrying on a business operation or in connection with the business operation or have been included as revenue in the computation of net profits, but not including debts owed by a person who is or used to be a director or managing partner whether or not the debts arose before or during the time such person is a director or managing partner; and

(2) The claim for debts is not barred from court action by statute of limitations and is
sufficiently evidenced for the purpose of suing the debtor.

The procedures to write-off Bad Debts:

A. Debt by a debtor exceeding Thai Baht 500,000, the following procedures are required:

(1) Demands for payment have been made and the matter has been pursued
to the extent suitable to the case of such acts and such demands have been
clearly evidenced and yet the debts remain unsettled because

(a) the debtor died, is missing or proved to be missing and
has no property to repay the debts, or

(b) the debtor dissolved his business, and the debts due
from him to the other creditors with preceding preferential rights over his
entire properties exceed the value f his properties.

(2) A civil action has been brought against the debtor and after a court order or
injunction the debtor does not have sufficient property to settle the debts; or

(3) A bankruptcy action has been brought against the debtor and a compromise has been reached with the debtor with court approval or the debtor has been adjudged
bankrupt and the first lot of the debtor’s properties have been shared out.

B. Debt by a debtor of more than Baht 100,000 up to Baht 500,000, the following procedures are required:

(1) Demands for payment have been made and the matter has been pursued
to the extent suitable to the case of such acts and such demands have been
clearly evidenced and yet the debts remain unsettled because

(a) the debtor died, is missing or proved to be missing and
has no property to repay the debts, or

(b) the debtor dissolved his business, and the debts due
from him to the other creditors with preceding preferential rights over his
entire properties exceed the value f his properties.

(2) A civil action has been brought against the debtor and the court has accepted the
plaint; or

(3) A bankruptcy action has been brought against the debtor and it has been accepted by the court.

In case of (2) or (3) above, it is required that the director or managing partner of the
company issue an order approving the write-off of the Bad Debt within 30 days
from the relevant accounting year-end.

C. Debt by a debtor not exceeding Thai Baht 100,000, the following procedures are required:

(1) Demands for payment have been made and the matter has been pursued
to the extent suitable to the case of such acts and such demands have been
clearly evidenced and yet the debts remain unsettled; and

(2) A lawyer has expressed his opinion that the costs associated
with the court proceedings will be higher than the amount expected to be
recovered.

Note that once the creditor has complied with all above mentioned rules and regulations, the creditor must write-off the receivable as a Bad Debt expense in the relevant accounting period. In case of category (B), the Bad Debt must be written off in the accounting period in which the relevant court accepts the civil complaint
or the bankruptcy petition.

Please contact MSNA for your Thai tax and accounting questions.

Today, THAI ACCOUNTANT got a very timely question.

Since last month, we are continuously giving donations to flood victims of Thailand. Can we include it as deductions for computation of our corporate income tax; at what rate we should use?

Answer:

We acknowledge your generosity. Indeed, you can use your expenses as deduction to
compute your Corporate Income Tax.

Donation expenses given to flood victims between 1 September 2011 and 31 December 2011 can be deducted at 1.5 times the actual expense but the valued amount condition at 10% of net assessable income for the purpose of personal income tax computation and 2% of net profit for corporate income tax computation, still applies.

Contact MSNA for your tax and accounting questions in Thailand.

Social Security and Its Benefits

In Thailand, Social Security Office was designated by the government to impose such scheme to ensure that proper social security assistance is provided to its members. The Social Security Scheme is operated according to the Social Security Act B.E 2533 (A.D. 1990) and its Amendment .E. 2537 (A.D. 1994) and B.E. 2542 (A.D. 1999). The Office is responsible to provide financial assistance to its members during the occurrence of sickness, maternity, invalidity, old age and unemployment, death, the provision of medical care and the provision of child allowance.

Its members, so called insured person s are the employees who started working at the age of not under fifteen and not over sixty years old in the company with 1 or more employees. The employers with 1 or more employees have
to submit the Registration Form within 30 days since the employee started working. In case the number of employees increased, the employer will submit for new Employee Registration Form if he or she has not received social security card before. Thus, the employers can submit the Registration Form by themselves or by his agent or any authorized person. Once the employee’s name has been registered, he can receive the Social Security Card within more or less 5 days after registration. The Social Security Office will send the Social Security Card to him so that he can show it when he claim benefits at the Social Security Office and to use it when they fill up the contribution form
for recording of contribution payment. Thus, one insured person can only have one Social Security Card although he may change job in the future. He will also receive the Medical Card after the registration and having paid contribution for 3 months. With this, he must select a hospital where he prefers to claim medical treatment benefits. Once the SSO sent him the Medical Card, he can receive free medical treatment at the registered hospital indicated in the medical card.

The contribution or the Social Security Fund must be submitted and paid to the Social Security Office within the 29^th of each following month. To pay the contribution, employers must deduct a partial amount to be paid from employee’s salary and pay their part at the same amount of employee’s contribution.

The following are the benefits that a registered employee can claim:

1. Sickness or Injuries benefits consist of free medical treatment at the registered hospital and cash benefits due to sick leave. This can be claimed if the contribution is paid for not less than 3 months within 15^th months before the date of receiving the medical treatment.

2. Maternity Benefits consist of cash or lump sum benefit for delivery. This can be claimed if the contribution is paid for not less than 7 months within 15 months before the date of confinement. The Social Security Office will pay maternity benefits at the rate of 50% of wages or salaries for 90 days.

3. Invalidity Benefits consist of free medical treatment and cash benefit.

4. Death Benefits consist of funeral grant and survivors allowance. This can be claimed if the contribution is paid for not less than 1 month within 6 months before death.

5. Child Allowance consists of monthly allowance paid to the first two children of the insured person below 6 years of age. This can be claimed if the contribution is paid for not less than 12 months within 36 months before the
month of receiving benefits.

6. Old – Age Benefits consist of lump sum amount or pension that an insured person will receive upon reaching the old age. This can be claimed if the contribution is paid for not less than 180 months, 55 years of age and cessation of being an insured person.

7. Unemployment benefits. Only private sector employees under Social Security Fund can claim cash benefits if the contribution is paid for not less than 6 months within 15 months before unemployment:

– For unemployment resulted from laid-off, the insured person will receive 50% of
wages up to 180 days within 1 year

– For unemployment resulted from voluntary resignation, the insured person will
receive 30% of wages up to 90 days within 1 year.

In Thailand, employees are entitled to compensation schemes to cover injuries, illness and death both inside and outside of work place. These schemes are called Social Security Fund and Workmen’s Compensation Fund

Social Security

The Social Security Act requires employers to register each employee for Social Security insurance at the Area Office of Social Security, under the Social Security Office.

The Social Security Act also requires employers to withhold social security contributions from each employee’s monthly salary. The employer is required to match the contribution from the employee and both contributions must be remitted to the Social Security Office within the 29^th day of the following month. Thus, the maximum monthly fee is Baht 1,500 or Baht 750 for each party.

This insurance fund provides compensation to employees in case of injury, illness, disability or death that is unrelated to performing work duties. Compensation is also provided for childbirth, child welfare, old age pensions and unemployment.

However, this Social Security Act is not applicable to:

– Government officials and regular employees of the Central, Provincial and Local administration except for monthly temporary employees;

– Employees of foreign governments or international organizations;

– Employees of employers who have offices in the country and being stationed abroad;

– Teachers or headmasters of private schools under the Private School Law,

– Students, nurse students, undergraduates, or apprentice doctors who are employees of
schools, universities or hospitals;

– Other undertakings or employees as may be prescribed in the Royal Decree

Read the laws:

Social Security Act – English

Workmen’s Compensation

The Workmen’s Compensation Act states that the employer must provide compensation or benefits at minimum rates prescribed by the law for employees who suffered injuries and illness or death during or as a result of performing their work duties. There are four types of compensation benefits:

1. The compensation amount or indemnity

In general, the compensation amount is paid in case of injuries, disability or death at a rate of 60% of monthly wages, from 3 days to 15 years depending on the case.

2. The medical expenses

Actual and necessary medical expenses must be paid up to Baht 45,000 to 300,000 depending on the severity of the cases as prescribed in the Ministerial Regulations. (Read on for the Thai version of Ministerial Regulations prescribing the medical expenses B.E. 2551)

3. Industrial rehabilitation expenses

Employment rehabilitation expenses must be paid as necessary, up to Baht 20,000.

4. Funeral expenses

In the event of death or disappearance, funeral expenses will be paid at a minimum amount equal to 100 times the minimum daily wage rate.

However, this Compensation Act is not applicable to:

– Employees or government official of the Central, Provincial and Local administration;

– Employees of non-profit organizations;

– State enterprises employees;

– Private school teachers and headmasters (under the Private School Law)

– Other employees as specified in the Ministerial Regulation.

Read the laws:

Workmen’s Compensation Act – English

Workmen’s Compensation Act – Thai

A foreigner who owns a company here in Thailand has asked THAI BUSINESS EXPERT some questions regarding dormant company status.

I own a newly set up limited company here in Thailand but I’ve decided not to
continue its operation for a while as I am planning to go back home to focus on
my existing business. However, I’m a little confused because I heard from
someone that it is impossible in Thailand just to register a company and not to
have any activities. Do I need to close down this company and register anew
when I get back here? But, I also heard from somebody that I can continue my
business later and put it in dormant for the time being. How does it really
work here in Thailand? I would appreciate if you could advise me on this matter.

Answer:

A dormant company refers to a registered company with no trading activities and
accounting transactions for a certain period. It is possible to register a limited
company then keep it inactive since there is no time limit for keeping a
company in dormant status. Thus, you may choose to put your company inactive for
some time as long as you perform some administrative duties each year such as closing
of the accounting books, having them audited by a Thai CPA and filing of the
audited financial statements and corporate income tax returns by 150 days from
the accounting year-end even when you are not trading. Failure to file the
audited financial statements to Department of Business Development, Ministry of
Commerce, may result in a criminal penalty up to Baht 50,000 for the company
and Baht 50,000 for the Director.

In case your company upon its incorporation has registered with VAT and you prefer
to put it in dormant status, the company is still responsible to file its NIL
monthly VAT return. If you are planning to go back home, you should assign
somebody to assist you in filing this monthly return within the 15^th
of each month. Failure to submit it on time would have a penalty of 500 per
return to be paid to the Revenue Department. However, filing NIL monthly VAT
return for many months may be the reason for the Revenue Department to visit
your company. You may choose to file Por Por 09, VAT registration form to inform
the Revenue Department of temporary cease of operation. Usually this is good
for a year. The Revenue Department may choose to erase your company from the VAT
system if you have ceased your operation for more than one year.

Eventually, if you would like to put your newly registered company limited into dormant
status for certain reasons (e.g. you are not ready to trade yet or would like
to take a break for some time), MSNA can help you on how to make it possible. Rest assured that you can always continue your trading activities later and you would not need to close down your company. We can also assist you in filing NIL monthly VAT returns if you have VAT registration. And if you decide to close it down, MSNA is the best
people you should talk to.

Today, THAI ACCOUNTANT got an interesting question regarding the tax incentives related to employee training expenses.

Our Thailand-based company provides training courses to companies’ employees. We
heard from our clients that they can deduct 200% of the training cost when they
pay to us. How is it possible?

Answer:

Yes, your clients are able to deduct 200% of the training cost not as a discount
from their payment to your training course but they can use this as
expenditures for the purpose of computation and submission of their Corporate
Income Tax.

As imposed by Department of Skill Development, Ministry of Labour of Thailand, the
Skill Development Promotion Act B.E. 2545 has been issued to encourage enterprises to provide training, upgrading skills, knowledge and competencies for employees and for those who are not employees. And also encourage private sector to set
up and register with the DSD its own training centers for workplace learning
and training. The incentives have been provided to enterprises by deducting the
cost of training 200% from the annual tax payment. The compulsory measure has
been applied for the establishments with at least 100 employees which have to
provide training for the employees at the rate of 50% of the total number of
employees, if not the employer have to pay contribution to the Skill
Development Fund approximately 480 Baht per head per year for the number of untrained employees. Furthermore, the establishments gain other benefit under this Act such as exemption tax of the training machines, bringing experts or trainers to train their workers, free of charge of water and electric fees.

But before your clients can use this training cost as their expenditures, you must
check with the Labor Ministry if your training courses have to be approved by
them. You can contact them for details on how you can register your courses
with them.

After your courses have been approved by the Labor Ministry, your clients can use 200%
of the amount they pay for training in those courses. 100% of the expense is
normal deduction from your income and the other 100% will be deducted from the
net profit before tax. They will have to fill out the form prescribed by the
Revenue Department, which is the form to keep track of the expenses of sending
employees for training for each accounting period, and they should keep it for
future checking by the tax authorities.

For more expert advice on accounting and tax, please feel free to contact MSNA,
Thailand Accountant.

First-time home buyers in Thailand are benefiting from a new tax scheme recently approved by the Thai Cabinet. This scheme will enable low-income earners to have their
own houses, in response to the Thai Government’s urgent policy of increasing the peoples’ standard of living.

The incentives are summarized as follows:

1. To qualify as first-time buyers, the home buyers must not have previously owned
any residential property or have been recorded as the householder in the House
Registration, unless there is evidence to prove that they were not the owners.

2. The value of residential properties must not be more than Baht 5,000,000.

3. As amended by the Cabinet on 27 September 2011, the proposed tax
exemption of 10% of the cost of a new residential unit costing no more than
Baht 5,000,000 (i.e. up to Baht 500,000) will be treated as a tax exemption and thus deductible from tax payable when calculating personal income tax.

4. The ownership transfer of the property must be registered between 21 September 2011
and 31 December 2012 and the owner must hold the ownership for at least 5 years.

5. Eligible first-time buyers cannot have previously benefited from any of the following
tax schemes:

• Tax allowance for interest paid in respect of the purchase, hire-purchase or
  construction of a residential building.
• Tax exemption on the amount paid to buy a new residential building or condominium in accordance with the Ministerial Regulation No. 271 B.E. 2552 (2009); or
• Tax exemption on the income derived from the sale of residential property to buy a new residential property in accordance with the Ministerial Regulation No. 241
  B.E. 2546 (2003)

6. In case of co-borrowing, a co-borrower who owns a residential property stated in
no. 1 or has benefited from the tax schemes as discussed in no. 5 is not
eligible for a tax exemption.

This tax scheme however is subject to conditions that will be announced by the Director-General of the Revenue Department of Thailand.

The purpose of this summary is to provide awareness to those eligible first time
home buyers. Please contact MSNA, Thailand Accountant, for an expert advice regarding your tax planning.

The Thai Cabinet, during its meeting on 13 September 2011, has approved the
guidelines to refund the excise taxes for the qualified first time car buyers
in order to promote the auto manufacturing industry and to increase purchasing
power by lowering the cost burden for people acquiring the necessities for
daily living. At the same time, it would enable the Government to earn more from the collection of corporate income tax, value-added tax, and car excise tax.

How to become eligible for excise tax refund as a first time car buyer?

Answer:

According to the scheme, the following criteria to become eligible for the excise tax
refund are as follows:

– The first time car buyer must be at least 21 years old and the car purchased must
also be manufactured in Thailand, excluding those produced with imported used parts.

– The car purchased is the first car of the buyer and the purchase is made during September 16, 2011 to December 31, 2012.

– The car must be a passenger car with the engine capacity of not over 1,500 CC or
pick up or double cab and must not be assembled from used parts imported from
overseas.

– The buyer must possess the car for at least 5 years and the buyer must claim for
the refund with the Excise Department along with a letter confirming the
non-transfer of car within 5 year period and copies of hire purchase contract
in case the car is hire purchased.

– The Department of Land Transport will record the 5 year non transfer condition in
its data base and also in the car registration book and will also check and disallow any such transfer within the 5 year period.

How much excise tax can be refunded?

Answer:

The excise tax will be refunded based on actual excise tax paid but not exceeding
THB 100,000 per car. The refund will be made after one year of possession
starting from October 1, 2012.

For questions about Thailand accounting and taxation, please contact MSNA, Thailand Accountant.

THAI ACCOUNTANT summarized the simplified rules that have been issued under the Notification of Director-General of Revenue Department No. 182 where a VAT registered person (or company) wishes to issue a tax invoice as part of a set of commercial documents, e.g. the tax invoice is within the same set together with the delivery note, receipt, etc.

If the tax invoice is not the first document in the set, the requirements are as
follows:

• The tax invoice and the copy of the tax invoice must contain the phrase “Documents in a Set”.
• The copy of the tax invoice must also contain the phrase “Copy of Tax Invoice”.
• The above phrases must be printed by the computer as part of the preparation of the tax invoice by the computer system. It is not acceptable to use a rubber stamp or typewriter to make such phrases or to handwrite them on the documents.

This has been effective from 18 June 2011.

If you have any tax or accounting questions, please contact MSNA.