Specific business tax in Thailand.

Business operating in Thailand and exceeding 1.8M THB in turnover are subject to paying VAT (value added tax), or in other words, an indirect tax imposed on the value added at each stage of production and distribution.

However, the nature of some businesses, such as financial institutions and services, does not allow for clear distinction between production costs and the value added, which resulted in the introduction of Specific Business Tax (SBT). SBT is a parallel tax to VAT and its origins likewise date back to 1992.

As previously mentioned, some of the business liable to pay SBT instead of VAT operate in finances, namely banks, financial institutions, insurance and loan companies and others. Other qualifying entities that fall into this category must bear a resemblance to the above-listed businesses in terms of transaction type; are real estate companies and businesses concerning sale of securities. The law, however, allows for exemptions and the full list of SBT exempted types of businesses can be found here.

Tax rates

Since it is hard to define clear borders between production costs and the value added, SBT is calculated from tax bases – gross receipts received or receivable from the business carried on by a person liable to tax.

BusinessTax BaseRate
Banking, Finance and similar businessInterest, discounts, service fees, other fees, profits from foreign exchange3%
business of finance, securities and credit foncierInterest, discounts, service fees, other fees, profits from foreign exchange3%
Life InsuranceInterest, service fees and other fees2.5%
Pawn BrokerageInterest, fees, remuneration from selling overdue property2.5%
Business with regular transactions similar to commercial banksInterest, discounts, service fees, other fees, profits from foreign exchange3%
Real estateGross receipts0.1%
Foreign company engaging in international transportationGross receipts3%
Foreign company not conducting business in Thailand but receiving dividends from ThailandGross receipts10%
Foreign company not conducting business in Thailand but receiving other types of income apart from dividend from ThailandGross receipts15%
sale of securities in a securities marketGross receipts0.1%

Registration and filing a return

Businesses or persons that are subject to SBT are required to register to such tax within 30 days of the commencement of their operations. In case of Bangkok-based companies, the registration takes place at the Area Revenue Office. Outside companies must register at the District Revenue Office.

As with VAT, SBT must be also filed and paid on a monthly basis regardless of the company’s income. Both return and payment are due by the 15th of each month and in case of a multiple-branched offices, it must be done separately by individual branches/places of business.

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