What is a Financial Statement?
A Financial statement is a formal record of the financial activities of a business, person, or other entity presenting the results of operations and the financial position of the company.
Who shall have the duty to keep accounts?
A registered partnership, public limited company, or limited company established under a Thai law, a juristic person established under a foreign law engaging in a business in Thailand, and a joint venture under the Revenue Code shall have the duty to keep accounts, and must provide the bookkeeping for its business operations in accordance with the details, rules and procedures prescribed under the Accounting Act, B.E. 2543 (2000). Failure to provide bookkeeping or comply with the regulations shall be liable to penalty.
All companies in Thailand need to prepare and comply with the following:
-Monthly Financial Reports (Balance Sheet, Profit & Loss Statement)
-Withholding Corporate Income Tax Return (PND 3, 53)
-Withholding Income Tax Remittance Return (PND 54)
-Half-year Corporate Income Tax Return (PND 51)
-Value Added Tax Return (PP 30)
-Annual Corporate Income Tax Return (PND 50)
-Annual Financial Statement
-Accounting Transactions Record
What is a Balance Sheet?
A Balance Sheet is a financial statement that summarizes a company’s assets, liabilities and shareholders’ equity at a specific point in time. It’s called a balance sheet because the two sides balance out. A company has to pay for all the things it has (assets) by either borrowing money (liabilities) or getting it from shareholders (shareholders’ equity). These three balance sheet segments give investors an idea as to what the company owns and owes, as well as the amount invested by the shareholders.
Why do we need a Balance Sheet?
We can use this report to obtain a complete picture of the financial results and financial position of a business on the last date of the financial year. A balance sheet records the arrangement of money in a business. It shows the accounting value of all the company’s assets, liabilities and equity at one moment in time. In turn, this may lead to conclusions regarding the liquidity of the entity. We can use the Balance sheet data to compute key indicators that reveal the company’s ability to meet its obligations.
When must a company make and submit a Balance Sheet?
The submission of financial statements shall be in accordance with the rules and procedures prescribed by the Directors-General of the Revenue Department and the Department of Business Development.
A company must make their balance sheets at least once every twelve months. Such twelve-month period constitutes the company’s accounting period or financial year. A newly established company should close accounts within 12 months from its registration. A qualified external auditor must certify the financial reports. Consequently, the officer must file hose reports with the Revenue Department and Department of Business Development every year.
One or more auditors must examine the balance sheets. The officer must then submit it for adoption to a general meeting within four months after its date. They also need to send a copy to every person entered in the register of shareholders at least three days before the general meeting. The company must also keep copies in their office during the same period for inspection by the shareholders.
Where the accounts or the documents relevant thereto are lost or damaged, the person having the duty to keep accounts shall notify the Chief Accounts Inspector or the Accounts Inspector of the loss or damage, in accordance with the rules and procedures prescribed by the Director-General, within fifteen days from the date of knowledge thereof, or the date such loss or damage ought to have been known.
What happens upon failure to submit the audited financial reports on time?
The company’s annual financial reports must be filed, along with its annual income tax return, with the Revenue Department and Department of Business Development, within 150 days after the end of its accounting period. Otherwise, the company is liable to a certain penalty or fine which may also be applicable to its responsible officer.
Can a company change its year-cycle of account?
Yes, by obtaining written approval from the Revenue Department’s Chief Accounts Inspector. Their officer needs to submit Form SorBorChor 4 together with other related documents.
What is the ASEAN ECONOMIC COMMUNITY (AEC) about?
The ongoing intensive regional economic integration leads to the establishment of ASEAN Economic Community (AEC), a single regional common market of ASEAN countries by 2015.
The regional integration’s objective is to create by then a competitive market of over 600 million people with an approximate GDP of over 2 trillion USD in ASEAN countries: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.
The AEC has the goal of transforming ASEAN into a stable, prosperous, and highly competitive region with economic development, reduced poverty and socio-economic disparities.
What are the core elements of the AEC?
1. Free flow of goods
Free flow of goods is one of the principal means to achieve the aims of a single market and production base. A single market for goods will also facilitate the development of production and networks in the region and enhance ASEAN’s capacity to serve as a global production centre or as a part of the global supply chain.
2. Free flow of services
Free flow of trade in services is one of the important elements in realising the AEC. There will be substantially no restriction to ASEAN services suppliers in providing services and in establishing companies across national borders within the region.
3. Free flow of investment
A free and open investment regime is key to enhancing ASEAN’s competitiveness in attracting foreign direct investment (FDI) as well as intra-ASEAN investment. Sustained inflows of new investments and reinvestments will promote and ensure dynamic development of ASEAN economies. Therefore all industries will soon open up for investment, phasing out the exclusions according to schedules. There will be immediate granting of national treatment to ASEAN investors with only a few exclusions. Moreover, there will also be streamlining of Investment process and procedures.
4. Freer flow of capital
Freer flow of capital will not only strengthen ASEAN Capital Markets, but also Development and Integration. Facilitates the flows of payments and transfer of current account transactions
5. Free flow of skilled labour
Free flow of skilled labor allows for managed mobility or facilitated entry for the movement of natural persons engaged in trade in goods, services, and investments, according to the prevailing regulations of the receiving country, primarily in order to support the free flow of services.
What are the benefits of the AEC?
The above described core elements will result in more regional cooperation. This will also improve the scale of efficiencies, dynamism and competitiveness of AEC-based companies.
AEC will enable easier movement of goods, services, investment, capital and people — ultimately, it will offer new ways of accessing new markets.
In the near future, all parts of the economic system in ASEAN countries, including the service sectors will be integrated into the ASEAN Economic Community.
The AEC in the context of its single market and free-flow policies, will definitely be an opportunity to gain greater comparative advantages. At the same time, to increase revenues by expanding markets and customer base inside ASEAN.
AEC-based companies will benefit greatly as various goods or services can be sold or provided without any additional tax in different countries, effectively creating a single market entity and production base for all ASEAN countries.