As a part of an initiative to promote competitiveness, below is the summary of the recently enacted Royal Decree No. 530 by the Thai government in relation to the Thailand’s Corporate Income Tax Reduction.

  • Companies or juristic partnerships (including companies listed on Stock Exchange of Thailand):

– Accounting period commencing on/after 1 January 2012, tax rate = 23%

– Accounting period commencing on/after 1 January 2013, for the next 2 accounting periods, tax rate = 20%

  • Companies or juristic partnerships, with fully paid up capital not exceeding Baht 5 million on the last day of the accounting period and revenue of no more than Baht 30 million from sales of goods or services during the accounting period:

– The portion of net profit of THB 1 – 150,000, tax rate = 0%

– The portion of net profit of THB 150,001-1,000,000, tax rate = 15%

– The portion of net profit over THB 1,000,000: tax rate = 23% for the accounting period commencing on or after 1 January 2012 and 20% for the accounting period commencing on or after 1 January 2013 onwards.

It should be noted that the income tax reduction to 20% for SMEs (companies or juristic partnerships, with fully paid up capital not exceeding Baht 5 million on the last day of the accounting period and revenue of no more than Baht 30 million from sales of goods or services during the accounting period) does not have any limited period as opposed to other companies or juristic partnerships.

In addition, the Royal Decree No. 531 has been enacted to reduce the corporate income tax for the companies listed on the Market for Alternative Investment (MAI), except those for which are still entitled to 20% corporate income tax rate. The applicable corporate income tax rate of 25% on the first Baht 50 million of net profit for the accounting period commencing on or after 1 January 2011 shall be applied to the following:-

(i) The company that has been listed prior to 1 January 2010 and entitled to the tax reduction under the Royal Decree No. 467 (20% corporate income tax rate), and then completed the utilization of the 20% rate for 3 consecutive accounting periods before 31 December 2011;

(ii) The company that has been listed prior to 1 January 2010 and never been entitled to the 20% corporate income tax rate under the Royal Decree No. 467;

(iii) The company that has been listed during 1 January 2010 to 31 December 2011.

Contact MSNA for your Thailand accounting and tax questions.