| In Thailand, all of the laws in connection with taxation | | | | expenses include ordinary and necessary expenses; |
| are governed by the Thai Revenue Code. The | | | | interest with exception of company's funds and |
| Ministry of Finance administers the procedures in | | | | interest on capital reserves; taxes, with exception of |
| connection with tax collections. The government's | | | | VAT and CIT paid to Thai government; net losses |
| Revenue Department collects taxes under four main | | | | that have been carried forward from the previous |
| categories such as corporate income tax, value | | | | five years; bad debts; wear and tear and |
| added taxes (VAT), stamp duty, and personal | | | | depreciation; contributions in connection with |
| income tax. | | | | provident fund; donations up to 2% of net profit; |
| The country's tax collecting authorities also include | | | | and entertainment expenses which can be up to |
| the Customs Department, which collects import as | | | | 0.3% of the overall receipt however, it should not |
| well as export duties; the Excise Department, which | | | | exceed ten million baths. Further, special rates have |
| is responsible for the collection of excise tax; and | | | | been fixed for deductible expenses. For instance, |
| other local authorities which collects municipal and | | | | deduction is about 200% in the case of Research |
| property taxes. Above mentioned is just a brief info | | | | and Development expense. Likewise, in the case of |
| on the taxation system in Thailand. In this article, | | | | job training, it is 150% deduction in connection with |
| discussed further in detail is regarding corporate | | | | its expenses. |
| income tax as well as its features and rates. | | | | Now we will discuss at what rate corporate income |
| Corporate Income Tax (CIT) is in the form of direct | | | | tax is deductible. Usually, corporate income tax rate in |
| tax, and is imposed on juristic companies as well as | | | | the country is 30% of net profit. However, rates |
| registered partnership firms that are formed under | | | | differ depending upon the nature of tax payers. |
| the laws of the country, such as limited partnerships, | | | | For example, in the case of small companies with a |
| private limited companies, public limited companies, | | | | paid up capital less than five million baths, corporate |
| and ordinary registered partnerships. | | | | income tax rate would be on the basis of below |
| Corporate income tax is imposed on both local and | | | | mentioned |
| foreign companies. It is calculated on the net profit | | | | - If net profit does not exceed one million baths, |
| and has to be paid at the end of every accounting | | | | then the rate at which corporate income tax would |
| period. But, a Thai company is entailed to pay tax on | | | | be charged is 15% |
| the basis of its worldwide net profit. On the other | | | | - If net profit is more than one million baths and up |
| hand, a foreign company operating in the country is | | | | to three million baths, then CIT rate would be 25% |
| required to pay corporate tax only on the net profit | | | | - In case, the net profit is more than three million |
| that it has derived from carrying out of the business | | | | baht, CIT rate would be 30% |
| in Thailand. But, a foreign company would be levied | | | | In the case of companies listed in SET (Stock |
| corporate tax on its overall receipts, provided it is | | | | Exchange of Thailand), the corporate income tax rate |
| engaged in businesses such as international transport | | | | would be as follows |
| business. | | | | - For net profit up to 300 million Baht, the rate would |
| Likewise, a foreign company, although it does not | | | | be 25% |
| have any business in the country, may be imposed | | | | - For the balance net profit, the rate is 30% |
| corporate tax on its receipts, in case, it derives any | | | | For companies newly listed in the SET, the rate |
| kind of income from Thailand, such as, interests, | | | | would be 25% of the net profit. Likewise, in the case |
| service fees, professional remuneration, and dividend. | | | | of banks that derive profits from IBF (International |
| Mostly, corporate income tax (CIT) is calculated on | | | | Banking Facilities), the rate would be 10% of net |
| the net profit of the company and that too on the | | | | profit. Corporate income tax rates also vary in the |
| accrual basis. While calculation, a company takes into | | | | case of foreign companies. For example, For instance, |
| account all revenues derived during an accounting | | | | the CIT rate would be 3% of net profit in the case |
| period, and deducts them all of the expenses that | | | | of foreign companies engaged in the business of |
| have been incurred during an accounting period as per | | | | international transportation. Similarly, the rate is 10% |
| the Revenue Code. | | | | in the case of foreign companies that receive any |
| On calculation of corporate income tax, deductible | | | | kind of remuneration or dividend from the country. |