Specific Business Tax (SBT) – a kind of tax you need to know in case your company has an interest income.

Today, THAI ACCOUNTANT discusses a case of Thailand Specific Business Tax (SBT) on interest income received from guarantee deposits.

A company providing commercial, industrial, marketing and management
consultancy services was required to put cash with its client as a guarantee for
possible damages and liabilities that may arise in the course of providing the
services to the client. In return, the client will pay an interest on the
amount and in the event of damages, the client has the right to make deduction
from the guarantee deposit and related interest. Under this circumstance, such
interest income received by the company is considered as revenue subject to
Specific Business Tax. When the company gets paid for the interest, it has to
submit 3% of the interest received as SBT using Specific Tax Return (form SBT
40) within the 15^th of the following month. In doing so, another 10%
on top on the SBT has to be included in the SBT return as a municipal tax. In short,
the company has to submit 3.3% of the interest receipt.

Contact MSNA for your accounting and tax questions.

Certain types of businesses are subject to Specific Business Tax (SBT) rather than Value Added Tax (VAT). Businesses subject to SBT must pay VAT on their purchases of goods and services but are not entitled to a VAT credit. The SBT ranges from 2.5 – 3.0 per cent on monthly gross receipts. When a monthly return is filed and SBT is paid, an
additional amount of 10% of the SBT payable is levied as a municipal tax.

Businesses that are subject to SBT

• Banking, financial and similar business
• Life Insurance
• Pawn Brokerage
• Real Estate
• Any other business specified by the Royal Decree i.e. business engages in repurchasing agreement (REPO) and factoring

Activities of certain entities are exempted from SBT such as:

• Activities of Bank of Thailand, Government Savings Bank, Government Housing Bank and Bank for Agriculture and Agricultural Cooperatives
• Activities of the Export-Import Bank of Thailand, the Industrial Finance Corporation of Thailand, Asset Management Corporation, Small Industrial Finance Cooperation and Secondary Mortgage Corporation
• Activities of National Housing Authority, Government Pawn Brokerage and Pension Fund
• Activities of selling securities listed in the Stock Exchange of Thailand

Specific Business Tax Base and Rates

Filing Specific Business Tax Return and Payment

SBT taxable period is a calendar month. SBT return (Form SBT 40) must be filed (and payment must be submitted) on a monthly basis by the 15^th of the following month
whether or not the business has income.

Contact MSNA for your accounting and tax questions.