Corporate income tax in Thailand.
Corporate Income Tax (CIT) is a direct tax levied on a juristic company or partnership conducting business in Thailand or conducting business in Thailand but deriving certain types of income from Thailand.
- Company/juristic partnership incorporated under Thai Law – limited company, public company limited, limited partnership and registered partnership
- Company/juristic partnership incorporated under foreign law that:
- Conducts business in Thailand
- Conducts business in other places including Thailand
- Has an agent carrying on business in Thailand that generates profit
- Does not conduct business in Thailand, but receives assessable income under Section 40 (2) (3) (4) (5) or (6) which is paid from or in Thailand
- A commercial or a profitable business governed by any juristic person established under a foreign law (including foreign governments)
- Joint venture
- A foundation/association conducting a profitable business that does not include the foundation or association as prescribed by the law
Tax return and payment
Any of the above-listed entities conducting a business in Thailand has a legal obligation to file their tax returns (Form CIT 50) within 150 days from the closing date of their accounting periods, which must also be accompanied by the tax payment. Other entities not engaged in generating business but only disposing funds/profit from Thailand are also liable to pay corporate income tax, however, they must do so within seven days of the disposal date (Form CIT 54).
As in other countries, for example, the UK, any entity in Thailand subject to CIT on net profits is further required to make tax prepayment. Companies are obliged to estimate their annual net profit as well as its tax liability and make a prepayment no later than two months after the first six months of their accounting periods. Effectively, companies will pay their corporate income tax in two payments instead of one, spreading the costs over a longer period of time.
Foreign entities receiving income from Thailand but not conducting any business in the country are subject to tax at a flat rate. In these instances, the tax is deducted as part of withholding tax directly at the source of the payment and is to be remitted within seven days of the following month in which the payment is made.
Corporate income tax calculation and rates
Entities conducting business in Thailand calculate their CIT in the following fashion:
Net profit generated from business activities during a certain accounting period – all expenses in accordance with the condition prescribed by the Revenue Code = total taxable amount.
Dividend income follows different rules, which, altogether with more information about deductible expenses and depreciation, can be found here.
|Small company||Net profit not exceeding 1M THB||15%|
|Net profit exceeding 1M THB||20%|
|Companies listed in Stock Exchange of Thailand (SET)||Net profit||20%|
|Companies newly listed in Stock Exchange of Thailand (SET)||Net profit||20%|
|Company newly listed in Market for Alternative Investment (MAI)||Net profit||20%|
|Bank deriving profits from International Banking Facilities (IBF)||Net profit||10%|
|Foreign company engaging in international transportation||Gross receipts||3%|
|Foreign company not conducting business in Thailand but receiving dividends from Thailand||Gross receipts||10%|
|Foreign company not conducting business in Thailand but receiving other types of income apart from dividend from Thailand||Gross receipts||15%|
|Foreign company disposing profit out of Thailand||Amount disposed||10%|
|Profitable association and foundation||Gross receipts||2% or 10%|