If your company in Thailand gives a loan to the director(s) of the company, or to another company or individuals, it is considered as regularly conducting lending activities in a way that is similar to commercial banks. Your company is subject to Specific Business Tax (SBT) on interest income received on the loan. If you use a cash basis in computing SBT, the SBT amount will be computed based on the actual interest income received. In the
event that a borrower failed to pay the loan, the lender is not responsible to
pay SBT on the accrued interest income of the defaulted loan amount. Read more
on Thailand specific business tax.
What if you do not charge interest on the loan? The Revenue Department upon auditing your accounts will assess the interest income for you using the market rate, or at least the rate that you should have got from a fixed deposit account at a commercial bank had you not loaned the money to the people. However, if your company has a loan from someone else or a bank, the interest to be assessed will be at least the rate you have to pay your creditor for the loan you got from them.
Interest income, recognized by you or assessed by the Revenue Department is part of operating income and it makes your net profit (if any) higher and thus your corporate income tax higher.
Contact MSNA for your questions on Specific Business Tax and Thai taxation.