Companies and partnerships established under Thai laws are subject to income tax on income earned from within and outside of Thailand. Companies and partnerships required to pay income tax include, but are not limited to:

  • Limited companies.
  • Registered ordinary and limited liability partnerships.
  • Joint ventures.
  • Foundations and associations.
  • A branch of a foreign corporation earning from sources within Thailand.

Corporate Income Tax is imposed on the net profits as per the generally accepted accounting principles and according to the conditions described in the Revenue Code of Thailand. The tax rate is currently 20% on taxable profits, however progressive rates up to 20% are granted to SMEs. Key rules and regulations to pay particular attention to include:

  • Every return must be accompanied by an audited financial statement and must be submitted within 150 days from the closing date of their accounting period.
  • 50% of the estimated annual income tax must be paid by the end of the eighth month.
  • Failure to pay the estimated tax will result in a fine to the amount of 20% of the deficit.

Thai residents and non-residents are taxed on their Thailand-sourced income. A resident is any person residing in Thailand for 180 days or more in a calendar tax year. Assessable income is subject to progressive tax rates, up to the maximum rate of 35%. The taxpayer is liable to file a personal income tax return and make a payment to the Revenue Department within the last day of March following the taxable year.

Value added tax (VAT) registration is required for all businesses that reach a sales volume of THB 1.8 million. Currently, the rate is 7%, which is reduced from the nominal rate of 10%. VAT returns must be filed and paid within 15 days of the following month.

Withholding tax can be a confusing subject in Thai tax laws. Essentially, it is the practice of deducting tax from payments to service suppliers, payment of dividends and payments of interest of THB 1,000 or more. To fully comply with Thai tax laws, withholding tax must be paid first by the person or company making the payment, a withholding tax certificate must then be provided when such a payment is made. This means that the service provider has part of its corporate income tax already paid. At the end of the financial year, withholding tax deducted in payments to a service provider constitutes as a tax credit of the corporate income tax of the service provider for the following year.

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