The objective of this guide is to highlight the key concepts of specific business tax in Thailand.
The specific business tax was introduced in 1992 and is imposed on specific types of business in Thailand.
Let’s find out more on specific business tax.
What is specific business tax?
Specific business tax is a type of indirect tax introduced to replace business tax and is imposed on companies excluded from value-added tax (VAT).
Businesses operating in Thailand and exceed a turnover of THB 1.8 million are subject to VAT, 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, do not allow for a clear distinction between production costs and the value-added.
Who is liable to specific business tax?
Businesses that are subject to specific business tax are:
- Banking under the law governing commercial banking or any other specific law
- The business of finance, securities and credit foncier under the law governing the operation of the business of finance, securities and credit foncier
- Life insurance under the law governing life insurance
- Pawnbroking under the law governing pawnshops
- Business with regular transactions similar to commercial banks, such as the provision of loans, provision of guarantees, exchange of currencies, issuance, purchase or sale of bills or transfer of money abroad by different means
- Sale of immovable property in a commercial or profitable manner, irrespective of the manner in which such property is acquired, only in accordance with the rules, procedures and conditions prescribed by a royal decree
- Sale of securities in a securities market under the law governing securities exchange of Thailand
- Any other business as prescribed by a royal decree
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What businesses are exempted from specific business tax?
The activities or businesses that are exempted from specific business tax include:
- Bank of Thailand, the Government Savings Bank, the Government Housing Bank and the Bank for Agriculture and Agricultural Cooperatives
- Industrial Financial Corporation of Thailand
- A savings cooperative, only in respect of loans provided to its members or to another savings cooperative
- A provident fund under the law governing provident funds
- National Housing Authority, only in respect of sale or hire-purchase of an immovable property
- Pawnbroking business of a ministry, sub-ministry, department and a local government authority
- Any other business under section 91/2 as prescribed by a royal decree
Special business tax rates and tax base
The specific tax rates and tax base are as follows:
| Business | Tax base | Tax rates |
| Banking, finance and similar business | 1. Interest, discounts, service fees, other fees, gross profits from purchase or sale of, or obtained from, negotiable instruments or other instruments of indebtedness 2. Gross profits from currency exchange issue of negotiable instruments or other instruments of indebtedness or remittance of currency to foreign countries | 3% |
| Finance, securities and credit foncier business | 1. Interest, discounts, service fees, other fees, gross profits from purchase or sale of, or obtained from, negotiable instruments or other instruments of indebtedness 2. Gross profits from currency exchange issue of negotiable instruments or other instruments of indebtedness or remittance of currency to foreign countries | 3% |
| Life insurance | Interest, service fees and other fees | 2.5% |
| Pawn brokerage | Interest, fees, remuneration from selling overdue property | 2.5% |
| Businesses with regular transactions similar to commercial banks | 1. Interest, discounts, service fees, other fees, gross profits from purchase or sale of, or obtained from, negotiable instruments or other instruments of indebtedness 2. Gross profits from currency exchange issue of negotiable instruments or other instruments of indebtedness or remittance of currency to foreign countries | 3% |
| Real estate | Gross receipts | 0.1% |
| Sale of securities in a securities market | Gross receipts | 0.1% (exempted) |
Special business tax registration
An entity or individual who is subject to the special business tax must register such tax and submit Form P.T.01 at the Area Revenue Office if in Bangkok or at the District Revenue Office is situated elsewhere within 30 days of the commencement of their operations.
Specific business tax submission deadline
Specific business tax registered businesses must file and pay the tax returns along with submitting Form P.T.40 to the tax office.
The return and payment are due by the 15th of each month and in case of a multiple-branched office, it must be done separately by individual branches/places of business.
In the case that the tax does not reach THB 100, the business does not need to pay tax for that month but still has the duty to file and submit returns.
Where to submit specific business tax returns?
Businesses must submit Form P.T.40 and pay taxes at the following locations:
- Bangkok
- Branch Area Revenue Office in which the business is located
- Other locations designated by the Director-General of the Revenue Department as the place for filing and paying tax
- Other provinces
- Submit the return at the Branch Area Revenue Office in the location the business is established
- Other locations that the Director-General of the Revenue Department authorises as the place for filing and paying tax
*Note: Filing tax returns and payments can be made through the Revenue Department’s website.
Conclusion
Financial institutions, life insurance and real estates are examples of the businesses that are subject to specific business tax in Thailand, as they are excluded from VAT.
If you are a foreign investor in Thailand, we recommend engaging with Acclime’s tax services for extra support and guidance when filing and submitting taxes in Thailand.
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