Most companies, including many foreign entities, registered, doing business, or earning income in Thailand have Thai corporate income tax (CIT) obligations. There are exceptions, but this discussion will focus on CIT filing requirements.
Corporate income taxes in Thailand can vary
The standard corporate income tax rate in Thailand is 20%. However, companies that meet certain criteria may have lower rates. For example, some BOI companies may qualify for a 0% rate, and some foundations may qualify for a 2% rate. These rates generally apply to net profit and in some cases gross receipts.
There are three main filings for Thai Corporate Income Tax
For every annual accounting period (12 months), companies must file a Form CIT 50 along and remit any taxes owed for that period to the Revenue Department. This must be done within 150 days from the end of that period.
If a company transfers income or profits out of Thailand, however, it must file a Form CIT 54 and make the appropriate tax payment to the Revenue Department within seven days of that transaction. This applies to both Thai and foreign companies operating in Thailand.
While some jurisdictions require estimated Thai corporate income tax payments at certain times during a company’s fiscal year, Thailand requires a mid-year prepayment. Within 60 days from the end of the first six months of a company’s reporting year, it must file a Form CIT 51 and pay half its estimated tax liability. This then is credited towards the annual tax liability.
Mid-year Form CIT 51 filings could increase your tax burden
A major pitfall when it comes to calculating estimated taxes for a Form CIT 51 is there are penalties for getting it wrong. Basically, if you underestimate your net profits, either for the six- or 12-month period, by 25% or more, you could be penalised 20% of any tax shortfall. There are justifiable reasons set forth by the Revenue Department you could claim, but they are narrow and could be subject to interpretation by officials.
Make sure your Thai corporate income tax is completed correctly
Paying taxes is an obligation that every company must fulfil. Nevertheless, you still want to ensure that you take advantage of all deductions and benefits allowable by law. GPS Accounting has a team of expert Thai CPAs who have a deep understanding of Thai tax laws and regulations. They can explain Thai corporate income tax calculations and procedures in clear English and work with you to make sure your filings are correct, on time, and to your benefit. Contact GPS Accounting today to learn how we can help you with your corporate income taxes. We are located in the heart of Bangkok, here are the directions from BTS Asok to our office.