| |
- |
Small and medium size company can choose to deduct special initial allowance on the date of acquisition for computer (40%), plant (25%) and machinery (40%).
Personal Income Tax (PIT) is a direct tax levied on income of a person. A person means an individual, an ordinary partnership, a non-juristic body of person, a deceased person and an undivided estate. In general, a person liable to PIT has to compute his tax liability, file tax return and pay tax, if any, accordingly on a calendar year basis.
1. Taxable Person
Taxpayers are classified into "resident" and "non-resident". "Resident" means any person residing in Thailand for a period or periods aggregating more than 180 days in any tax (calendar) year. A resident of Thailand is liable to pay tax on income from sources in Thailand on a cash basis, regardless where the money is paid, as well as on the portion of income from foreign sources that is brought into Thailand. A non-resident is, however, subject to tax only on income from sources in Thailand.
2. TAX BASE
2.1 Assessable Income
Income chargeable to the PIT is called "assessable income". The term covers income both in cash and in kind. Therefore, any benefits provided by an employer or other persons, such as a rent-free house or the amount of tax paid by the employer on behalf of the employee, are also treated as assessable income of the employee for the purpose of PIT. Assessable income is divided into 8 categories as follows:
(1) income from personal services rendered to employers;
(2) income by virtue of jobs, positions or services rendered;
(3) income from goodwill, copyright, franchise, other rights, annuity or income in the nature of annual payments derived from a will or any other juristic Act or judgment of the Court;
(4) income in the nature of dividends, interest on deposits with banks in Thailand, shares of profits or other benefits from a juristic company, juristic partnership, or mutual fund, payments received as a result of the reduction of capital, a bonus, an increased capital holdings, gains from amalgamation, acquisition or dissolution of juristic companies or partnerships, and gains from transferring of shares or partnership holdings;
(5) income from letting out of property on hire and from breaches of installment sales or hire-purchase contracts;
(6) income from liberal professions;
(7) income from construction and other contracts of work;
(8) income from business, commerce, agriculture, industry, transport or any other activity not specified earlier.
2.2 Deductions and Allowances
Certain deductions and allowances are allowed in the calculation of the taxable income. Taxpayers shall make deductions from assessable income before the allowances are granted. Therefore, taxable income is calculated by:
TAXABLE INCOME = assessable income - deductions - allowances
 Deductions allowed for the calculation of PIT |
| |
| Type of Income |
Deduction |
| |
Income from employment |
| |
| |
Income received from copyright |
| |
Income from letting out of property on hire |
| |
- Building and wharves |
| |
- Agricultural land |
| |
- All other types of land |
| |
- Vehicles |
| |
- Any other type of property |
| |
| |
Income from liberal professions |
| |
| |
Income derived from contract of work whereby the contractor provides essential materials besides tools |
| |
Income derived from business,commerce, agriculture, industry, transport, or any other activities not specified earlier |
|
| 40% but not exceeding 60,000 Baht |
| 40% but not exceeding 60,000 Baht |
| |
| 30% |
| 20% |
| 15% |
| 30% |
| 10% |
| |
| 30% except for the medical profession where 60% is allowed |
| actual expense or 70% |
| |
| actual expense or 65-85% depending on the types of income |
|
|
Allowances (Exemptions) allowed for the calculation of PIT |
| |
| Types of Allowances |
Amount |
Personal allowance
- Single taxpayer
- Undivided estate
- Non-juristic partnership or body of persons
Spouse allowance
Child allowance (child under 25 years of age and studying at educational institution, or a minor, or an adjusted incompetent or quasi-incompetent person)
Parents allowance (parents over 60 years of age with income less than 30,000 Baht)
Old age allowance (over 65 years of age)
|
30,000 Baht for the taxpayer
30,000 Baht for the taxpayer's spouse
30,000 Baht for each partner but not exceeding 60,000 Baht in total
30,000 Baht
15,000 Baht each (limited to three children)
30,000 Baht each
190,000 Baht income exemption each
|
Education (additional allowance for child studying in educational institution in Thailand)
Life insurance premium paid by taxpayer or spouse
Approved provident fund contributions
Long term equity fund |
2,000 Baht each child
Amount actually paid but not exceeding 50,000 Baht each
Maximum allowance (exemption) of 300,000 Bath, but not exceeding 15% of income
Maximum allowance (exemption) of 300,000 Bath, but not exceeding 15% of income |
Home mortgage interest
Social insurance contributions paid by taxpayer or spouse
Charitable contributions |
Amount actually paid but not exceeding 50,000 Baht
Amount actually paid each
Amount actually donated but not exceeding 10% of income after standard deductions and allowances |
|
2.3 Tax Credit for Dividends
Any taxpayer who domiciles in Thailand and receives dividends from a juristic company or partnership incorporated in Thailand is entitled to a tax credit. In computing assessable income, a taxpayer shall gross up his dividends by the amount of the tax credit received. The amount of tax credit is then creditable against his tax liability.
Tax credit = dividend x corporate tax rate/(100-corporate tax rate)
3. Tax Rates
3.1 Progressive Tax Rates
Personal income tax rates applicable to taxable income are as follows.
Tax rates of the Personal Income Tax |
| |
| Taxable Income |
Tax Rate (%) |
Tax Amount |
Accumulated Tax |
| 0 - 80,000 (before 2004) |
Exempt |
- |
- |
| 0 - 100,000 (2004 onwards) |
Exempt |
- |
- |
| 100,001 - 500,000 |
10 |
40,000 |
40,000 |
| 500,001 - 1,000,000 |
20 |
100,000 |
140,000 |
| 1,000,001 - 4,000,000 |
30 |
900,000 |
1,040,000 |
| 4,000,001 and over |
37 |
|
|
|
|
In the case where income categories (2) - (8) mentioned in 2.1 are earned more than 60,000 Baht per annum, taxpayer has to calculate the amount of tax by multiplying 0.5% to the assessable income and compare with the amount of tax calculated by progressive tax rates. Taxpayer is liable to pay tax at the amount whichever is greater.
|
3.2 Separate Taxation
There are several types of income that the taxpayer shall not include or may not choose to include such income to the assessable income in calculating the tax liability.
Income from sale of immovable property
Taxpayer shall not include income from sales of immovable property acquired by bequest or by way of gift to the assessable income when calculating PIT. However, if the sale is made for a commercial purpose, it is essential that such income must be included as the assessable income. Nevertheless, from January 2003, gains from sales of residential buildings shall not be included as income if such gains are spent on purchasing a new home within 1 year before or after selling his primary residence.
Interest
Interest income may, at the taxpayer's selection, be excluded from the computation of PIT provided that a tax of 15 per cent is withheld at source. However, the following forms of individual's interest income are exempt from 15 per cent withholding tax;
| |
(1) |
interest on bonds or debentures issued by a government organization, |
| |
(2) |
interest on saving deposits in commercial banks if the aggregate amount of interest received is not more than 20,000 Baht during a taxable year, |
| |
(3) |
interest on loans paid by a finance company, |
| |
(4) |
interest received from any financial institutions organized by a specific law of Thailand for the purpose of lending money to promote agriculture, commerce or industry. |
Dividends
Taxpayer who is a resident in Thailand and receives dividends or shares of profits from a registered company or a mutual fund which tax has been withheld at source at the rate of 10 per cent, may choose to exclude such dividends from the assessable income when calculating PIT. However, in doing so, taxpayer will be unable to claim any refund or credit as mentioned in 2.3.
4. Withholding Tax
For certain categories of income, the payer of income has to withhold tax at source, file tax return (Form PIT 1, 2, or 3 as the case may be) and submit the amount of tax withheld to the District Revenue Office. The tax withheld shall then be credited against tax liability of a taxpayer at the time of filing PIT return. The following are the withholding tax rates on some categories of income.
| Types of income |
Withholding tax rate |
| 1. Employment income |
5 - 37 % |
| 2. Rents and prizes |
5 % |
| 3. Ship rental charges |
1 % |
| 4. Service and professional fees |
3 % |
5. Public entertainer remuneration
- Thai resident
- non-resident |
5 %
5 - 37% |
| 6. Advertising fees |
2 % |
5. Tax Payment
Taxpayer is liable to file Personal Income Tax return (Form PIT 90 or 91) and make a payment to the Area Revenue Branch Office within the last day of March following the taxable year. Taxpayer who derives categories of income (5) - (8) during the first six months of the taxable year is also required to file half - yearly return (Form PIT 94) and make a payment to the Area Revenue Branch Office within the last day of September of that taxable year. Any withholding or half-yearly tax, which has been paid, can be used as a credit against the tax liability at the end of the year.
Corporate Income Tax (CIT) is a direct tax levied on a juristic company or partnership which is established under Thai or foreign law and carries on business in Thailand or derive certain types of income from Thailand.
The term "juristic company or partnership" (hereinafter called "company") means a limited company, a limited partnership or a registered ordinary partnership incorporated under Thai or foreign law as well as an association and a foundation engaged in business producing revenue. The term also includes any joint venture and any trading or profit-seeking activity carried on by a foreign government or its agency or by any other juristic body incorporated under a foreign law.
1. Taxable Person
Corporate income tax is levied on both Thai and foreign companies. A Thai company means a company incorporated under the law of Thailand. Thai company is subject to tax in Thailand on its worldwide net profit at the end of each accounting period (12 months). A foreign company means a company incorporated under foreign law. Generally, a foreign company is treated as carrying on business in Thailand if it has an office, a branch or any other place of business in Thailand or has an employee, agent, representative or go-between for carrying on business in Thailand. A foreign company carrying on business in Thailand is subject to CIT only for net profit arising from or in consequence of business carried on in Thailand, at the end of each accounting period. However, a foreign company engaged in international transport is subject to tax on its gross receipts. When a foreign company disposes its profit out of Thailand, such profit will be subject to tax on the sum disposed. Profit also means any sum set aside out of profits as well as any sum which may be regarded as profit.
A foreign company, not carrying on business in Thailand but deriving certain types of income from Thailand, such as service fees, interests, dividends, rents, professional fees, is subject to corporate income tax on the gross amount received. It is collected in the form of withholding tax by which the payer of income shall deduct the tax from the income at the rate shown in 3 (Tax Rates).
2. Tax Calculation
In the calculation of CIT of a company carrying on business in Thailand, it is calculated from the company's net profit on the accrual basis. A company shall take into account all revenue arising from or in consequence of the business carried on in an accounting period and deducting therefrom all expenses in accordance with the condition prescribed by the Revenue Code. As for dividend income, one-half of the dividends received by Thai companies from any other Thai companies may be excluded from the taxable income. However, the full amount may be excluded from taxable income if the recipient is a company listed in the Stock Exchange of Thailand or the recipient owns at least 25% of the distributing company's capital interest, provided that the distributing company does not own a direct or indirect capital interest in the recipient company. The exclusion of dividends is applied only if the shares are acquired not less than 3 months before receiving the dividends and are not disposed of within 3 months after receiving the dividends
In calculating CIT, deductible expenses are as follows.
| |
1. |
Ordinary and necessary expenses. However, the deductible amount of the following expenses is allowed at a special rate:
- 200% deduction of Research and Development expense,
- 150% deduction of job training expense,
- 200% deduction of expenditure on the provision of equipment for the disabled; |
| |
2. |
Interest, except interest on capital reserves or funds of the company; |
| |
3. |
Taxes, except for Corporate Income Tax and Value Added Tax paid to the Thai government; |
| |
4. |
Net losses carried forward from the last five accounting periods; |
| |
5. |
Bad debts; |
| |
6. |
Wear and tear; |
| |
7. |
Donations of up to 2% of net profits; |
| |
8. |
Provident fund contributions; |
| |
9. |
Entertainment expenses up to 0.3% of gross receipt but not exceeding 10 million Baht; |
| |
10. |
Depreciation : Provided that in no case shall the deduction exceed the following percentage of cost as shown below. However, if a company adopts an accounting method, which the depreciation rates vary from year to year, the company is allowed to do so provided that the number of years over which an asset depreciated shall not be less than 100 divided by the percentage prescribed below.
|
| |
| Types of Assets |
Depreciation |
1. Building
1.1 Durable building
- durable building acquired within
5 September 2001 - 4 September 2002
- plant of SMEs*
1.2 temporary building |
5 %
initial allowance of 20% on the date of acquisition and the residual shall be depreciated at the rate in 1.1
initial allowance of 25% on the date of acquisition and the residual shall be depreciated at the rate in 1.1
100 % |
| 2. Cost of acquisition of depleted natural resources |
5 % |
3. Cost of acquisition of lease rights
3.1 no written lease agreement
3.2 written lease agreement containing no renewal clause or containing renewal clause but with a definite duration of renewable periods |
10 %
100 % divided by the original and renewable lease periods |
4. Cost of acquisition of the right in a process, formula, goodwill, trademark, business license, patent, copyright or any other rights:
4.1 unlimited period of use
4.2 limited period of use |
10 %
100 % divided by number of years used |
5. Other depreciable assets not mentioned above excluding land and stock-in-trade
5.1 machinery used in R&D
5.2 machinery used in SMEs*
5.3 cash registering machine
5.4 passenger car or bus with no more than 10 passengers capacity |
20 %
initial allowance of 40 % on the date of acquisition and the residual can be depreciated at the rate in 5
initial allowance of 40 % on the date of acquisition and the residual can be depreciated at the rate in 5
100 % or
initial allowance of 40 % on the date of acquisition and the residual can be depreciated at the rate in 5
depreciated at the rate in 5 but the depreciable value is limited to one million Baht
|
6. Computer and accessories
6.1 SMEs*
6.2 other business |
initial allowance of 40 % on the date of acquisition and the residual can be depreciated over 3 years
depreciated over 3 years |
| * SMEs refer to any Thai companies with fixed assets less than 200 million Baht and number of employee not exceeding 200 people. |
3. Tax Rates
The corporate income tax rate in Thailand is 30% on net profit. However, the rates vary depending on types of taxpayers.
| |
| Taxpayer |
Tax Base |
Rate |
| 1. Small company1 |
- Net profit not exceeding 1 million Baht
- Net profit over 1 million Baht but not exceeding 3 million Baht
- Net profit exceeding 3 million Baht |
15%2
25%
30% |
|
2. Companies listed in Stock Exchange of Thailand (SET) |
- Net profit for first 300 million Baht
- Net profit for the amount exceeding 300 million Baht |
25%3
30% |
|
3. Companies newly listed in Stock Exchange of Thailand (SET) |
Net Profit |
25%4 |
| 4. Company newly listed in Market for Alternative Investment (MAI) |
- Net Profit for first 5 accounting periods after listing
- Net Profit after first 5 accounting periods |
20 %4
30 % |
| 5. Bank deriving profits from International Banking Facilities (IBF) |
Net Profit |
10 % |
| 6. Foreign company engaging in international transportation |
Gross receipts |
3% |
| 7. Foreign company not carrying on business in Thailand receiving dividends from Thailand |
Gross receipts |
10% |
| 8. Foreign company not carrying on business in Thailand receiving other types of income apart from dividend from Thailand |
Gross receipts |
15% |
| 9. Foreign company disposing profit out of Thailand |
Amount disposed |
10% |
| 10. Profitable association and foundation |
Gross receipts |
2% or 10% |
| 11. Regional Operating Headquaters (ROH) |
Net Profit |
10% |
| 1 |
Small company refers to companies with paid-up capital less than 5 million Baht at the end of each accounting period.
|
| 2 |
The 15% rate applies for accounting periods beginning on or after 1 January 2004.
|
| 3 |
The reduced rate applies for currently listed companies for 5 accounting periods beginning on or after 6 September 2001.
|
| 4 |
The reduced rate applies for newly listed companies (registered within 6 September 2001- 5 September 2005) for 5 accounting periods beginning on or after 6 September 2001.
|
|
4. Withholding Tax
Certain types of income paid to companies are subject to withholding tax at source. The withholding tax rates depend on the types of income and the tax status of the recipient. The payer of income is required to file the return (Form CIT 53) and submit the amount of tax withheld to the District Revenue Offices within seven days of the following month in which the payment is made. The tax withheld will be credited against final tax liability of the taxpayer. The following are the withholding tax rates on some important types of income.
| Types of income |
Withholding tax rate |
| 1. Dividends |
10 % |
| 2. Interest |
10 % if paid to associations or foundations
1 % in other case |
| 3. Royalties |
10 % if paid to associations or foundations
3 % in other case |
| 4. Advertising Fees |
2 % |
| 5. Service and professional fees |
3 % if paid to Thai company or foreigncompany having permanent branch in Thailand
5% if paid to foreign company not having permanent branch in Thailand |
| 6. Prizes |
5 % |
Government agencies are required to withhold tax at the rate of 1% on all types of income paid to companies.
5. Tax Return and Payment
Thai and foreign companies carrying on business in Thailand are required to file their tax returns (Form CIT 50) within 150 days from the closing date of their accounting periods. Tax payment must be submitted together with the tax returns. Any company disposing funds representing profits out of Thailand is also required to pay tax on the sum so disposed within seven days from the disposal date (Form CIT 54).
In addition to the annual tax payment, any company subject to CIT on net profit is also required to make tax prepayment (Form CIT 51). A company is obliged to estimate its annual net profit as well as its tax liability and pay half of the estimated tax amount within two months after the end of the first six months of its accounting period. The prepaid tax is creditable against its annual tax liability.
As regards to income paid to foreign company not carrying on business in Thailand, the foreign company is subject to tax at a flat rate in which the payer shall withhold tax at source at the time of payment. The payer must file the return (Form CIT 54) and make the payment to the Area Revenue Branch Office within seven days of the following month in which the payment is made.
Value Added Tax
Value Added Tax (VAT) has been implemented in Thailand since 1992 replacing Business Tax (BT). VAT is an indirect tax imposed on the value added of each stage of production and distribution.
1. Taxable Person
Any person or entity who regularly supplies goods or provides services in Thailand and has an annual turnover exceeding 1.2 million Baht is subject to VAT in Thailand. Service is deemed to be provided in Thailand if the service is performed in Thailand regardless where it is utilized or if it is performed elsewhere and utilized in Thailand.
An importer is also subject to VAT in Thailand no matter whether one is a registered person or not. VAT will be collected by the Customs Department at the time goods are imported. Certain businesses are excluded from VAT and will instead be subjected to Specific Business Tax (SBT).
Under VAT, taxable goods mean all types of property, tangible or intangible, whether they are available for sales, for own use, or for any other purposes. It also includes any types of articles imported into Thailand. Services refer to any activities conducted for the benefits of a person or an entity, which are not the supply in terms of goods.
Area Revenue Branch Offices if it is situated elsewhere. Should taxpayer have several branches, registration application must be submitted to the Revenue Office where the headquarter is situated.
2. Exemptions
Certain activities are exempted from VAT. Those activities are :
| |
2.1 |
Small entrepreneur whose annual turnover is less than 1.2 Million Baht;
|
| |
2.2 |
Sales and import of unprocessed agricultural products and related goods such as fertilizers, animal feeds, pesticides, etc.;
|
| |
2.3 |
Sales and import of newspapers, magazines, and textbooks;
|
| |
2.4 |
Certain basic services such as;
| - |
transportation - domestic transportation and international transportation by way of land,
|
| - |
Healthcare services provided by government and private hospitals as well as clinics,v
|
| - |
Educational services provided by government and private schools and other recognized educational institutions,
|
| - |
Professional services - Medical and auditing services, lawyer services in court and other similar professional services that have laws regulating such professions,
|
| - |
Renting of immovable properties.
|
|
| |
2.5 |
Cultural services such as amateur sports, services of libraries, musuems, zoos;
|
| |
2.6 |
Services in the nature of employment of labour, research and technical services and services of public entertainers;
|
| |
2.7 |
Goods exempted from import duties under the Industrial Estate law imported into an Export Processing Zones (EPZs) and under Chapter 4 of the Customs Tafiff Act;
|
| |
2.8 |
Imported goods that are kept under the supervision of the Customs Department which will be re-exported and be entitled to a refund for import duties; and
|
| |
2.9 |
Other services such as religious and charitable services, services of government agencies and local authorities.
|
3. Tax Base
| |
3.1 General Goods and Services
Tax base of VAT is the total value received or receivable from the supply of goods or services. Value means money, property, consideration, service fees, or any other benefis which is ascertainable in terms of money. Tax base will also include any Excise tax arises in connection with such supply. However, tax base is exclusive of the value added tax itself and does not include any discounts or allowances, but only if discounts or allowances are clearly shown in the tax invoices.
|
| |
3.2 Imported Goods
Tax base = C.I.F. price + Import duty + Excise Tax (if any) + other taxes and fees
(if any) |
| |
3.3 Exported Goods
Tax base = F.O.B. price + Excise Tax (if any) + other taxes and fees (if any) |
4. Tax Rates
| |
4.1 General Rate
Currently, the rate is 7 percent. |
| |
4.2 Zero percent Rate
Certain activities are liable to VAT at the rate of zero percent. Those activities include :
| |
- |
export of goods; |
| |
- |
services rendered in Thailand and utilized outside Thailand;
|
| |
- |
aircraft or sea-vessels engaging in international transportation;
|
| |
- |
supply of goods and services to government agencies or state-owned enterprises under foreign-aid program;
|
| |
- |
supply of goods and services to the United Nations and its specialized agencies as well as embassies, consulate-general and consulates;
|
| |
- |
supply of goods and services between bonded warehouses or between enterprises located in EPZs.
|
|
5. Time of Supply
The time of supply of goods or services is important because it determines when a registered person should account for VAT. The time of supply will be determined as follows:
5.1 Goods
| |
5.1.1 General goods, the earliest of :
| |
- |
the time of delivery; or |
| |
- |
when ownership of goods is transferred; or |
| |
- |
a payment is made; or |
| |
- |
a tax invoice is issued. |
|
| |
5.1.2 Hire-purchase or installment sale, the earliest of :
| |
- |
the time each payment is due; or |
| |
- |
a payment is made; or |
| |
- |
a tax invoice is issued. |
|
| |
5.1.3 Supply of goods on consignment, the earliest of :
| |
- |
the time the consignee makes delivery or transfers |
| |
- |
ownership of the goods to buyer; or |
| |
- |
a payment is made; or |
| |
- |
a tax invoice is issued. |
|
| |
5.1.4 Imports, the earliest of :
| |
- |
the time import duty is paid; or |
| |
- |
a guarantee is put up; or |
| |
- |
a guarantor is arranged for; or |
| |
- |
a bill of lading is issued. |
|
| |
5.1.5 Exports, the earliest of :
| |
- |
the time export duty is paid; or |
| |
- |
a guarantee is put up; or |
| |
- |
a guarantor is arragned for; or |
| |
- |
a bill of lading is issued; or |
| |
- |
goods are sent from Thailand to an Export Processing Zone; or |
| |
- |
goods are exported from a bonded warehouse. |
|
5.2 Services
| |
5.2.1 In general, the earliest of :
| |
- |
the time a payment is made; or |
| |
- |
tax invoice is issued; or |
| |
- |
service is utilized. |
|
| |
5.2.2 Service contract where payment is made according to the service performed, the earliest of :
| |
- |
the time a payment is made; or |
| |
- |
tax invoice is issued; or |
| |
- |
service is utilized. |
|
| |
5.2.3 Imports
| |
- |
the time the payment is made. |
|
6. Tax Invoice
VAT registered person or entity is required to issue tax invoices every time the transactions are made showing details of nature and value of goods sold or services provided and also amount of VAT due. Tax invoice is used as evidence for claiming input tax credit. Tax invoice must contain at least the following elements;
| |
- |
the word "Tax invoice" in a prominent place, |
| |
- |
Name, address and tax identification number of the issuer, |
| |
- |
Name and address of the purchaser or customers, |
| |
- |
Serial numbers of tax invoice and tax invoice books (if applicable), |
| |
- |
Description, value and quantity of goods or services; |
| |
- |
Amount of VAT chargeable, and |
| |
- |
Date of issuance. |
7. Tax Calculation
VAT liability = Output Tax - Input Tax
"Output Tax" is a tax collected or collectible by VAT registered person from his customers when goods or services are supplied.
"Input Tax" is a tax charged by another registered person on any purchase of goods or provision of services. The term also includes any tax charged on imported goods.
8. Refund
In each month, if input tax exceeds output tax, taxpayer can claim for the refund, either in form of cash or tax credit to be used in the following months. Therefore, in case of zero-rated, taxpayer will always be entitled to VAT refund. As for unused input tax, it may be creditable against output tax within the next 6 months. However, the refund can only be claimed within 3 years from the last day of filing date.
Certain input taxes, such as tax in relation to entertaining expenses, are not creditable under VAT. However, those non-creditable input taxes can instead be used as deductible expenses under Corporate Income Tax (CIT).
9. VAT Registration
Any person or entity who is liable to VAT in Thailand must register to be VAT registered person or entity (Form VAT 01) before the operation of business or within 30 days after its income reaches the threshold. The registration application must be submitted to Area Revenue Offices if the business is situated in Bangkok or to the District Revenue Offices if it is situated elsewhere. Should taxpayer have several branches, registration application must be submitted to the Revenue Office where the headquarter is situated.
10. Tax Return and Payment
VAT taxable period is a calendar month. VAT return therefore must be filed on a monthly basis. VAT return (Form VAT 30) together with tax payment, if any, must be submitted to the Area Revenue Branch Office within 15 days of the following month. If taxpayer has more than one place of business, each place of business must file the return and make a payment seperately unless there is an approval from the Director-General of the Revenue Department. Services utilized in Thailand supplied by service providers in other countries are also subject to VAT in Thailand. In such a case, service recipient in Thailand is obliged to file VAT return (Form VAT 36) and pay tax, if any, on behalf of the service providers.
In the case where supply of goods or services is also subject to Excise tax, VAT return and tax payment, if any, must be submitted to the Excise Departmnet together with Excise tax return and tax payment within 15 days of the following month. In case of imported goods, VAT return and tax payment must be submitted to the Customs Department at the point of import.
|
Specific Business Tax (SBT) is another kind of indirect tax introduced in 1992 to replace Business Tax. Certain businesses that are excluded from VAT will instead be subject to SBT.
1. Taxable Person
Any person or entity who engages in certain businesses in Thailand is subject to SBT instead of VAT. Businesses that are subject to SBT include;
| |
-
|
Banking, Financial and similar business,
|
| |
-
|
Life Insurance,
|
| |
-
|
Pawn Brokerage,
|
| |
-
|
Real Estate,
|
| |
-
|
Any other business specified by the Royal Decree i.e. business engages in repurchasing agreement (REPO) and factoring.
|
2. Exemptions
Activities of certain entities are exempted from SBT such as:
| |
2.1
|
Activities of Bank of Thailand, Government Savings Bank, Government Housing Bank and Bank for Agriculture and Agricultural Cooperatives;
|
| |
2.2
|
Activities of the Export-Import Bank of Thailand, the Industrial Finance Corporation of Thailand, Asset Management Corporation, Small Industrial Finance Cooperation and Secondary Mortgage Corporation;
|
| |
2.3
|
Activities of National Housing Authority, Government Pawn Brokerage and Pension Fund; and
|
| |
2.4
|
Activities of selling securities listed in the Stock Exchange of Thailand.
|
3. Tax Base and Tax Rates
| |
|
Business
|
Tax Base
|
Tax Rate
(%)
|
|
1. Banking, Finance and similar business
|
Interest, discounts, service fees, other fees, profits from foreign exchange
|
3.0
|
|
2. Life Insurance
|
Interest, service fees and other fees
|
2.5
|
|
3. Pawn Brokerage
|
Interest, fees, remuneration from selling overdue property
|
2.5
|
|
4. Real estate
|
Gross receipts
|
3.0 (Currently reduced to 0.1 until 31 Dec 2003)
|
|
5. Repurchase Agreement
|
The difference between selling price and repurchasing price
|
3.0
|
|
6. Factoring
|
Interest, discounts, service fees and other fees
|
3.0
|
|
Remark : Local tax at the rate of 10 % is imposed on top of SBT.
|
|
4. SBT Registration
Any entity or person who is subject to SBT must register to be SBT registered person or entity (Form SBT 01) within 30 days of its first day of operation at the Area Revenue Branch Office if it is situated in Bangkok or at District Revenue Office it is situated elsewhere. Should taxpayer have several branches or offices, registration application must be submitted to Area Revenue Office or Area Revenue Branch Office where the headquarter is situated.
5. Tax Return and Payment
SBT taxable period is a calendar month. SBT return (Form SBT 40) must be filed on a monthly basis regardless whether or not the business has income. SBT return and payment must be submitted to the Area Revenue Branch Office within 15 days of the following month. If taxpayer has more than one place of business, each place of business must file its return and make the payment separately unless there is an approval from the Director-General.
Stamp duties are taxed on instruments and not on transactions or persons. For the purposes of stamp duty, an instrument is defined as any document chargeable with duty under the Revenue Code. The stamp duty rules are contained in Chapter VI of Title II of the Revenue Code.
1. Persons liable to stamp duty
Only instruments listed in the stamp duty schedule are subject to the stamp duty and the persons liable to pay stamp duty are those listed in column 3 of the schedule. They are, for example, the persons executing the instrument, the holders of the instrument or the beneficiary.
2. Instruments liable to stamp duty
The instruments liable to stamp duty include, inter alia, transfers of land, alease, stock transfers, debentures, mortgages, life assurance policies, annuities, power of attorney, promissory notes, letters of credit, travelers cheques.
3. Exemptions
3.1 General exemptions under the Revenue Code. They are:
- instruments listed in the stamp duty schedule;
- certain government departments and bodies and other organisations under section 121 of the Revenue Code, provided that this exemption shall not be extended to a government organisation using capital or circulating funds for carrying on commercial activities or to a commercial undertaking operated by a local government authority.
3.2 Exemptions under Royal Decrees, the order of the chairman of the National Executive Council no. 75/2515 B.E., dated December 8, 2515 B.E., and Thai laws
3.2.1 Exemption under Royal Decrees
Exemptions from stamp duty, provided in various Royal Decrees, are granted to the following examples:
(1) the Bank of Thailand;
(2) the Government Housing Bank;
(3) the Bank for Agriculture and Agricultural Co-operatives;
(4) a person carrying on business of transport, only in respect of receipt of passenger fares;
(5) a person carrying on entertainment business, only in respect of the receipt of admission fee;
(6) the Industrial Finance Corporation of Thailand;
(7) a surety, only in respect of suretyship covering debts on account of loans and advance made by the Bank for Agriculture and Agricultural Co-operatives;
(8) an issuer of receipts, only in respect of receiving money representing loans and advances made by the Bank for Agriculture and Agricultural Co-operatives;
(9) the National Housing Authority;
(10) a transferor, only in respect of the transfer of registered or approved securities for which the Stock Exchange of Thailand acts as regristrar;
(11) a person liable to duty, in respect of an instrument on which the stamp duty is less than one Baht, and in respect of a fraction of one Baht for an instrument subject to stamp duty amounting to one Baht or more;
(12) a transferor, only in respect of the transfer of bonds issued by the Bank of Government Housing Welfare, if the Bank of Thailand acts as registrar for such transfer;
(13) a contractor, only in respect of being engaged in mineral ore exploration under a contract made which a governmental agency, and only if the governmental agency does not award any compensation other than the right of production in the area covered by the contract;
(14) the Fund for Rehabilitation and Development of Financial Institutions;
(15) a transferor, only in respect of the transfer of bonds issued by the Bank of Thailand;
(16) a transferor, only in respect of the transfer of instruments liable to stamp duty between a provident fund set up under the Ministerial Regulation No. 162 (B.E.2526) Issued under the Revenue Code Governing provident Funds and a provident fund set up under the law governing provident funds;
(17) a transferor of bond issued by government enterprises;
(18) the Small Industries Finance Corporation;
(19) the Small Industries Credit Insurance Corporation;
(20) the operator of international banking facilities under the Notification of Ministry of Finance, subject: Operation of international banking facilities by commercial banks dated 16th September B.E. 2535, or as subsequently amended: Only in the case where the operator is a person liable to duty under the Stamp Duty Schedule;
(21) the Bank for Export and Import of Thailand.
3.2.2 Exemption granted by the order of the chairman of the National
Executive Council no. 75/2515 B.E., dated December 8, B.E. 2515
Juristic companies and partnerships organised under the laws of the United States which are parties to contracts with the United States Government in respect of the business carried on in Thailand in connection with the maintenance of military equipment and supplies and related services performed under contracts entered between such juristic companies or partnerships and the United States Government for the projects approved by the Thai Government, provided that such juristic companies or partnerships do not carry on any other business in Thialnd.
3.3.3 Exemption granted by Thai laws
There are a number of Thai laws that exempt stamp duty on certain entities such as:
(1) The Port Authority of Thailand Act;
(2) The State Railway of Thailand Act;
(3) The Petroleum Act (B.E. 2514);
(4) The Petroleum Income Tax Act (B.E.2514)
4. Rate of Stamp Duty
Rates of stamp duty are given in the schedule attached to the Chapter VI of Title II of the Revenue Code. The rates of duty range from 1 Baht to 200 Baht. A sample of stamp duty rates on some selected instrument is as follows:
|
Nature of Instrument/Transaction
|
Stamp Duty
|
|
1. Lease of land, building, or other construction or floating house
For every 1,000 Baht or fraction thereof of the rent or key money or both for the entire lease period.
|
1 Baht
|
|
2. Transfer of share, debenture, bond, and certificate of indebtedness issued by any company, association, body of persons or organisation
For every 1,000 Baht or fraction thereof of the paid-up value of shares, or of thenominal value of the instrument, whichever is the greater.
|
1 Baht
|
|
3. Hire-purchase of property
For every 1,000 Baht for fraction thereof of the total value.
|
1 Baht
|
|
4. Loan of money or agreement for bank overdraft
For every 2,000 Baht or fraction thereof of the total amount of loan or the maximum amount of overdraft agreed upon.
|
1 Baht
|
|
5. (1) Bill of exchange or similar instrument used like bill of exchange
For each instrument
(2) Promissory note or similar instrument used like promissory note
For each instrument
|
3 Baht
3 Baht
|
|
6. Bill of lading
If issued in a set, every one of the set must be stamped at such rate.
|
2 Baht
|
|
7. Cheque or any written order used in lieu of cheque
For each instrument
|
3 Baht
|
|
8. Letter of credit
(a) issued in Thailand
For value less than 10,000 Baht
For value of 10,000 Baht or over
(b) issued abroad any payable in Thailand
For each payment
|
20 Baht
30 Baht
20 Baht
|
|
9. Memorandum of association of a limited company submitted to the registrar.
|
200 Baht
|
5. Enforcement
5.1 Surcharge
5.1.1 Where an instrument is not duly stamped, the person liable to duty or the holder of the instrument or the beneficiary thereunder shall be entitled to present the instrument to the tax official for payment of duty who shall allow payment of the duty, subject to the following provisons:
(a) Where the instrument not duly stamped is an instrument executed in Thailand and is presented to tax official for payment of duty within 15 days from the day when the instrument was required to be duly stamped, payment of duty shall be allowed merely at the rates set forth in the Stamp Duty Schedule.
(b) In other cases, payment of duty shall be allowed, but a surcharge shall be imposed as follows:
(1) If it appears to the tax official that no more than 90 days have passed since the days when the instrument was required to be duly stamped, there shall be imposed a surcharge of twice the amount of duty or of 4 Baht, whichever is higher.
(2) If it appears to the official that more than 90 days have passed since the day when the instrument was required to be duly stamped, there shall be imposed a surcharge of five times the amount of the duty or of 10 Baht, whichever is higher.
5.1.2 If, in consequence of the inspection conducted by the official or of the charge preferred or information furnished by any person, whether or not a government official, it appears that:
(a) a receipt required to be issued under the Revenue Code has not been issued, the tax official shall have the power to charge the full amount of duty, and in addition, to impose a surcharge of six times the amount of the duty or of 25 Baht, whichever is higher.
(b) an instrument has not been duly stamped because
(1) no stamp has been affixed, the tax official shall have the power to charge the full amount of duty and, in addition, to impose a surcharge of six times the amount of the duty or of 25 Baht, whichever is higher.
(2) the amount of the stamps affixed is less than the amount of duty payable, the tax official shall have the power to charge the deficiency and, in addition, to impose a surcharge of six times the amount of the deficiency or of 25 Baht, whichever is higher.
(3) in all other cases, the competent official shall have the power to impose a surcharge equal to the amount of duty payable or 25 Baht, whichever is higher.
5.2 Punishment
(1) Whoever liable to duty or required to cancel stamps fails or refuses to pay the duty or to cancel the stamps shall be punished with a fine not exceeding 500 Baht.
(2) Whoever, with a view to evading payment of duty, issued a receipt of less than 10 Baht for the value received of 10 Baht or over, or divides the value received, or, with a view to evading compliance with the legal provisions on the stamp duty, wilfully falsifies any instrument, shall be guilty and punished with a fine not exceeding 200 Baht.
(3) Whoever wilfully puts a false date of cancellation of a stamp shall be punished with a fine not exceeding 500 Baht or imprisonment not exceeding three months or both.
(4) Whoever fails to prepare or keep records of the daily total of money or price, or fails to issue a receipt immediately on demand in pursuance, or issues a receipt not stamped in the correct amount, shall be punished with a fine not exceeding 500 Baht.
(5) Whoever by himself or in conspiracy with another person prevents issuance of a receipt, or fails to issue a receipt immediately upon receiving payment of money or price or issues a receipt showing an amount less than that of the money or price actually received, shall be punished with a fine not exceeding 500 Baht or imprisionment not exceeding one month or both.
(6) Whoever knowing fails to extend facilities to the tax official or tax inspector in the performance of his duty, or seizure of any instruments or documents, or disobeys the summons issued by the tax official or tax inspector or refuses to give answers when questioned, or contravenes the provisions on issuing receipts or invoices or procedural directions issued by the Director-General of the Revenue Department shall be guilty and punished with a fine no exceeding 500 Baht.
(7) Whoever, with fraudulent intent, has in possession a stamp known to be forged or deals in stamps which have been used or declared out of use by Ministerial Regulations shall be guilty and punished with a fine not exceeding 5,000 Baht or imprisionment not exceeding three years or both.
| |
|
|
Thailand has concluded tax treaties with follwing countries :
|
|
Countries
|
Entered into force
|
Tax Year of Enforcement
|
Remarks
|
|
1
|
|
Armenia
|
|
|
|
12 November 2002
|
1 January 2003
|
|
|
2
|
|
Australia
|
|
27 December 1989
|
1 January 1990
|
|
|
3
|
|
Austria
|
|
|
|
1 July 1986
|
1 January 1986
|
|
|
4
|
|
Bahrain
|
|
|
|
27 December 2003
|
1 January 2004
|
|
|
5
|
|
Bangladesh
|
|
|
|
9 July 1998
|
1 January 1999
|
|
|
6
|
|
Belgium
|
|
|
|
29 December 1980
|
1 January 1980
|
|
|
7
|
|
Bulgaria
|
|
|
|
13 February 2001
|
1 January 2002
|
|
|
8
|
|
Canada
|
|
|
|
16 July 1985
|
1 January 1985
|
|
|
9
|
|
China, P. R.
|
|
|
|
29 December 1986
|
1 January 1987
|
Amendment by exchange of letter
|
|
10
|
|
Cyprus
|
|
|
|
4 April 2000
|
1 January 2001
|
|
|
11
|
|
Czech Republic
|
|
|
|
14 August 1995
|
1 January 1996
|
|
|
12
|
|
Denmark
|
|
12 February 1999
|
1 January 2000
|
Old treaty enforced until
31 December 1999
|
|
13
|
|
Finland
|
|
26 February 1986
|
1 January 1987
|
|
|
14
|
|
France
|
|
|
|
29 August 1975
|
1 January 1975
|
WHT : enforced 29 August 1975
Amendment by exchange of letter
|
|
15
|
|
Germany
|
|
|
|
4 December 1968
|
1 January 1967
|
|
|
16
|
|
Hong Kong
|
|
7 December 2005
|
1 January 2006
|
|
|
17
|
|
Hungary
|
|
16 October 1989
|
1 January 1990
|
|
|
18
|
|
India
|
|
13 March 1986
|
1 January 1987
|
|
|
19
|
|
Indonesia (amendment)
|
|
21 October 2003
|
1 January 2004
|
Old treaty enforced until
31 December 2003
|
|
20
|
|
Israel
|
|
|
|
24 December 1996
|
1 January 1997
|
|
|
21
|
|
Italy
|
|
|
|
31 May 1980
|
1 January 1978
|
Amendment by exchange of letter
|
|
22
|
|
Japan
|
|
|
|
30 August 1990
|
1 January 1991
|
|
|
23
|
|
Korea (amendment)
|
|
29 June 2007
|
1 January 2008
|
|
|
24
|
|
Kuwait
|
|
25 April 2006
|
1 January 2007
|
|
|
25
|
|
Laos
|
|
|
|
23 December 1997
|
1 January 1998
|
|
|
26
|
|
Luxembourg
|
|
|
|
22 June 1998
|
1 January 1999
|
|
|
27
|
|
Malaysia
|
|
|
|
2 February 1983
|
1 January 1983
|
|
|
28
|
|
Mauritius
|
|
|
|
10 June 1998
|
1 January 1999
|
|
|
29
|
|
Nepal
|
|
|
|
14 July 1998
|
1 January 1999
|
|
|
30
|
|
Netherlands
|
|
|
|
9 June 1976
|
1 January 1976
|
|
|
31
|
|
New Zealand
|
|
14 December 1998
|
1 January 1999
|
|
|
32
|
|
Norway (amendment)
|
|
29 December 2003
|
1 January 2004
|
Old treaty enforced until
31 December 2003
|
|
33
|
|
Oman
|
|
|
|
27 February 2004
|
1 January 2005
|
|
|
34
|
|
Pakistan
|
|
7 January 1981
|
1 January 1979
|
|
|
35
|
|
Philippines
|
|
|
|
11 April 1983
|
1 January 1983
|
|
|
36
|
|
Poland
|
|
|
|
13 May 1983
|
1 January 1983
|
|
|
37
|
|
Romania
|
|
|
|
13 April 1997
|
1 January 1998
|
WHT : enforced 1 June 1998
|
|
38
|
|
Singapore
|
|
|
|
27 April 1976
|
1 January 1976
|
|
|
39
|
|
Slovenia
|
|
|
|
4 May 2004
|
1 January 2005
|
|
|
40
|
|
South Africa
|
|
|
|
27 August 1996
|
1 January 1997
|
|
|
41
|
|
Spain
|
|
|
|
16 September 1998
|
1 January 1999
|
|
|
42
|
|
Srilanka
|
|
|
|
12 March 1990
|
1 January 1991
|
|
|
43
|
|
Sweden
|
|
|
|
26 September 1989
|
1 January 1990
|
|
|
44
|
|
Switzerland
|
|
|
|
19 December 1996
|
1 January 1997
|
|
|
45
|
|
Seychelles
|
|
13 March 2006
|
1 January 2007
|
|
|
46
|
|
Turkey
|
|
13 January 2005
|
1 January 2006
|
|
|
47
|
|
Ukraine
|
|
27 November 2004
|
1 January 2005
|
|
|
48
|
|
United Arab Emirates
|
|
|
|
28 December 2000
|
1 January 2001
|
|
|
49
|
|
United Kingdom of
Great Britain and
Northern Ireland
|
|
|
|
20 November 1981
|
1 January 1981
|
|
|
50
|
|
United States of America
|
|
|
|
15 December 1997
|
1 January 1997
|
|
|
51
|
|
Uzbekistan
|
|
|
|
21 July 1999
|
1 January 2000
|
WHT : enforced 1 February 2001
|
|
52
|
|
Vietnam
|
|
|
| | | |
