Thailand's corporate income tax falls under the purview of the country's stringent regulatory framework, overseen by the Revenue Department. The Revenue Code of Thailand mandates the imposition of Corporate Income Tax (CIT) on both domestic and foreign companies operating within the country.
Revenue Code of Thailand
If you're planning to do business in Thailand, you'll need to follow the rules laid out in the Thai Revenue Code. This covers everything from how taxes are assessed and collected to personal and corporate income taxes, value-added tax, business taxes, and stamp duty.
Corporate Tax Related Services provided by Juslaws & Consult
The corporate tax department at Juslaws & Consult offers expert advice to ensure your company complies with existing tax regulations. It's important to understand the distinctions between a Thai company and a foreign company operating in Thailand. A Thai company is one incorporated under Thai law, while a foreign company operates under foreign law but conducts business in Thailand. Even if a foreign company doesn't operate in Thailand but earns income from the country, it's still subject to Corporate Income Tax (CIT) under the Revenue Code.
Corporate Income Tax on these types of income is based on gross income, where net profit is taken into account to allow companies established under Thai law to be subject to Corporate Income Tax on their net profits from worldwide sources. The net profits of Thai-sourced income of foreign companies are also subject to CIT.
According to the Revenue Department of Thailand, the following are the taxable persons who may be charged to pay the CIT:
1.1 A company or a juristic partnership incorporated under Thai law.
1.2 A company or a juristic partnership incorporated under foreign law
1.2.1 A company or juristic partnership incorporated under foreign laws and carrying on business in Thailand.
1.2.2 A company or juristic partnership incorporated under foreign laws and carrying on business in other places, including Thailand.
1.2.3 A company or juristic partnership incorporated under foreign laws and carrying on business in other places, including Thailand, in case of carriage of goods or carriage of passengers
1.2.4 A company or juristic partnership incorporated under foreign laws 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.
1.2.5 A company or juristic partnership incorporated under foreign laws and not carrying on business in Thailand but receiving assessable income under Section 40 (2)(3)(4)(5) or (6) which is paid from or in Thailand.
1.3 A business operating in a commercial or profitable manner by a foreign government, organization of a foreign government, or any other juristic person established under a foreign law.
1.4 Joint venture
1.5 A foundation or association carrying on revenue-generating business, but does not include the foundation or association as prescribed by the Minister in accordance with Section 47 (7) (b) under Revenue Code.
An accounting period is a defined timeframe during which accounting operations are conducted and evaluated. It serves an important role in investment processes, enabling prospective shareholders to assess a company's performance before making further investment decisions.
An accounting period typically spans twelve months, corresponding to either a calendar or fiscal year. However, there are exceptions where the period may be less than twelve months:
1. Newly incorporated company or juristic partnership: such entities may opt to use the period from their incorporation date as the first accounting period.
2. Change of accounting period: a company or juristic partnership has the option to request a change in the last day of an accounting period by filing a request with the Director-General.
In Thailand, income from various sources during any day within the accounting period can be subject to tax. For example, revenue from the sale of goods not exceeding THB 30 million is subject to the applicable corporate tax rate in Thailand.
As per the Revenue Department, the corporate income tax rate in Thailand is usually 20 percent, although reduced rates and exemptions may apply based on several factors. These factors include the nature of the business, registered capital amount, eligibility for tax holidays, listing on the Stock Exchange of Thailand, and status as a regional operating headquarters. Thai law mandates the filing of two corporate tax returns annually. Penalties are imposed for late filing, failure to file a tax return, or submission of a return containing false or insufficient information.
The lawyers at Juslaws & Consult have profound expertise in Corporate Income Tax Laws in Thailand and a wealth of experience in offering tax planning advice and services to businesses operating in the country. Our dedicated team of professionals is well-equipped to assist you with filing or providing consultations on managing Corporate Income Tax (CIT) or Personal Income Tax (PIT).
Juslaws & Consult offers a comprehensive range of legal services beyond Corporate Income Tax (CIT), including accounting and taxation services. If you need further information on any of our taxation services, please feel free to contact us.