Corporate Income Tax

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Corporate Income Tax

Corporate Income Tax is a direct tax imposed on a juristic company or partnership carrying on business in Thailand or deriving certain types of income from Thailand.

Under the Tax Code, there are five (5) types of taxable person
  1. A company or a juristic partnership established under Thai Law
  2. A company or a juristic partnership established under Foreign Law
  3. A business operating in a commercial or profitable manner by a foreign government, organization of a foreign government or any other juristic person established under a foreign law
  4. Joint venture
  5. A foundation or association carrying on revenue generating business

Companies or juristic partnerships established under Thai law are subject to Corporate Income Tax on its worldwide income. On the other hand, a foreign corporation, organized or existing under the laws of any foreign country is subject to tax only on income derived from sources within Thailand.

In order to receive the tax return, the company must have paid its corporate income tax less than withholding tax. All companies carrying on business in Thailand must file their tax returns, together with the tax payment. They must comply within 150 days from the closing date of their accounting period. Generally, the accounting period consists of 12 months. However, a new company may choose to use the period from its incorporation date to any date as the first accounting period.  If a company wishes to change its accounting period, it must obtain written approval from the Revenue Department. 

Tax Prepayment

Any company subject to Corporate Income Tax on net profits also need to make tax prepayment. These are taxes paid in advance before you actually incur them. A company must estimate its projected income as well as its tax liability. They must pay half of the estimated tax within 2 months after the first 6 months of its accounting period. The prepaid tax is creditable against its annual tax liability. 

A company or juristic partnership incorporated under foreign laws and not carrying on business in Thailand but receiving assessable income paid from or in Thailand shall be liable to pay 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 and pay to the Revenue Department within 7 days of the following month in which the payment is made.

CIT Calculation

You calculate the CIT from the company’s net profit on the accrual basis. A company shall take into account the sum of all revenues less all deductible expenses. It shall include all income arising in an accounting period, even though you have not received an income yet. It will also include all expenses on such income for such accounting period, even though there are unpaid expenses.

Dividend Income

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 company is on the Stock Exchange of Thailand’s list or 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 applicable only if they acquired the shares in not less than 3 months before receiving the dividends and are not disposed of within 3 months after receiving the dividends.

Taxpayer
Tax Base
Rate (%)
     
Small Company – Net profit from 300,000 15%
Any company with paid-up capital less     not exceeding 3M Baht   
than 5 Million Baht at the end of each accounting period. – Net profit over 3M Baht  20%
     
     
Companies registered in  Net profit 20%
Stock Exchange of Thailand (SET)    
     
     
Companies newly registered in  Net profit 20%
Market for Alternative Investment (MAI)    
     
     
Bank deriving profits from International  Net profit 10%
Banking Facilities (IBF)    
     
     
Foreign company engaging in international  Gross Receipts 3%
transportation    
     
     
Foreign company not carrying on business in  Gross Receipts 10%
Thailand receiving dividends from Thailand    
     
     
Foreign company not carrying on business in  Gross Receipts 15%
Thailand receiving other types of income     
apart from dividend from Thailand    
     
     
Foreign company disposing profit out Amount Disposed 10%
 of Thailand    
     
     
Profitable association and foundation Gross Receipts 2 or 10%