Thailand Country Profile taxation trade issues

Thailand

TAXES - ACCOUNTING

Corporate tax

Tax rate for resident companies	The tax rate of 30% applies to companies. The rate is reduced to 20% or 25% for listed companies meeting certain conditions provided in the tax law.

Tax rate on long-term capital gains	In Thailand, capital gains are imposed at the rate of 30%.

System governing groups of companies and dividends paid by subsidiaries to their parent companies	Dividends of foreign companies set up in Thailand are taxed at as corporate income.

Tax rate on branches	In Thailand, the corporate tax is applied on branches as for all the companies.

Income tax

Fiscal year

The fiscal year begins on January 1st and ends on December 31st of the same year.

Income tax rate

The rate varies from 5 to 37%.

From 1 to 50 000 THB	0%
From 50 000 to 100 000 THB	5%
From 100 000 to 500 000 THB	10%
From 500 000 to 1000 000 THB	20%
From 1000 000 to 4000 000 THB	30%
Beyond 4000 000 THB	37%

Tax deductions or other allowances

Deductions:
- 30 000 THB for the single people.
- 30 000 THB for spouses.
- 15 000 THB for every dependent child.
- Insurance allowances up to 10 000 THB
- Interests of loans paid for the purchase of main homes with a maximum rate of 10 000 THB.

VAT rates

Standard rates	7%

Reduced rates	Some goods and services are VAT exempted or zero-rated

Other important taxes

Name of tax	Rate
Specific Business Tax (SBT) - replaces VAT in certain businesses	0.1% to 3%
Petroleum Income Tax	50%

Accounting

Introduction
In Thailand, accounting rules are controlled by the Ministry of Trade.
The American accounting practices are recognized and accepted in Thailand.

General accounting principles
The period of an accounting year is 12 months.
Each entry can be registered in a foreign language.
The code allows to use various depreciation rates according to the nature and to the assets classification.
On the other hand, depreciation rate used in the various accounting books, must be used in the tax return of the income tax.
The pension funds taxes are not deductible, unless they are redistributed to the employees or approved by the managing department.
The dividends of actions are taxable as common dividends and can be declared only if there is a real increase of the capital.

Obligations and publications
Each company has to produce a balance sheet and a profit and loss account for each accounting year.

Certification and auditing
The external control of accounts must be given to a body of auditors chosen by the company and by the commercial department of the ministry of Treasury.

Professionals and representative organizations
The auditors and accountants association of Thailand is the accounting authority.

Useful links

For further information, please contact the Thailand Board of Investments or the Revenue Department of Thailand.

Last modified in 2006 - ongoing update