Today, we outline the two sections of the Revenue Code which talk about the assessment of corporate income tax from gross income and why a Thai company may be liable to submit income tax on behalf of its oversea-based parent company.

Section 71 – Assessing tax from gross income

In the case where:

(1) a company or juristic partnership does not file particulars necessary for tax calculation under the provisions of this Part or does not keep a book of account or does not follow requirements prescribed under Sections 17 and 68 Bis or does not bring books of account, documents or other evidence to an assessment official for interrogation under Section 19 or Section 23, the assessment official shall have the power to assess tax at the rate of 5 per cent of gross income before deduction of any expenses or gross sales before deduction of expenses of the accounting period, whichever is higher. If gross income before deduction of expenses or gross sales before deduction of expenses cannot be determined, the assessment official shall have the power to assess by comparing with the gross amount of the previous accounting period. If the amount of the previous accounting period cannot be determined, he shall assess as he deems appropriate.

(2) If any company or juristic partnership does not record particulars or records incompletely or does not record accurately within an account as prescribed under Sections 17 and 68 Bis resulting in paying no tax or less tax, an assessment official shall have the power to assess missing tax at the rate specified in Section 67 and may order that person to pay surcharge of two times of the amount of missing tax.

(3) If any company or juristic partnership does not comply with the Director-General’s order which is exercised under Section 17, an assessment official shall have the power to order that company or juristic partnership to comply with the Director-General’s order within thirty days from the date of receiving the order of such assessment official or he may order it to provide a person to comply with the Director-General’s order at the office of the assessment official within the above time period. If the company or juristic partnership does not comply or complies incompletely, the assessment official shall have the power to assess tax at the rate and procedures as mentioned in (1).

The provisions of this Section does not prevent the rights of an assessment official to assess tax payment under the provisions of other Sections.

The assessment under the provisions of this Section may be appealed.

Section 76Bis – A company incorporated under foreign laws which shall be deemed to be carrying on business in Thailand

For a company or juristic partnership incorporated under foreign laws which has an employee, an agent or a go-between for carrying on business in Thailand and as a result receives income or profits in Thailand, such company or juristic partnership shall be deemed to be carrying on business in Thailand and the person who acts as an employee, an agent or a go-between for the business, whether he is an individual or a juristic person, shall be deemed to be the representative of the company or juristic partnership incorporated under foreign laws and shall have the duty and liability to file a tax return and tax payment in accordance with the provisions of this Part, with respect to only the above mentioned income or profits.

In the case mentioned in paragraph 1, if a person who has the duty and liability to file a tax return and tax payment cannot calculate net profits for tax purposes under the provisions of this Part, the provisions regarding tax assessment under Section 71 (1) shall apply mutatis mutandis.

The assessment under this Section may be appealed.

Contact MSNA for your Thai accounting and tax questions.