Corporate Income Tax
Corporate Income Tax is applied to a Thai or foreign company carrying on business in Thailand on the net taxable profits at the tax rate of 30%. Howerver, as from the accounting period starting on or from 1 January 2013, the corporate tax rate has been reduced to 20%.
For companies and other taxable entities registered under the laws of Thailand, the Corporate Income Tax will be imposed on its worldwide income. The net taxable profits is computed by taking into account all revenue arising from or in consequence of the business carried on in accounting period and deducting all of the expenses in relation with conditions prescribed in the Thai Revenue Code.
For locally incorporated companies with paid up capital of no more than THB 5 milliion on the last day of the accounting period and revenue of no more than THB 30 million from sales of goods or services during the accounting period, corporate income tax is paid at progressive rates as follows:-
| Net profit (THB) |
Tax Rate |
| 1 - 300,000 |
Exempt |
| 300,001 - 3,000,000 |
15% |
| over 3,000,000 |
20% |
A companies registered in foreign countries will be liable for the Corporate Income Tax when it carrying on business in Thailand. The definition of “carrying on business in Thailand” for Corporate Income Tax purposes is very broad and includes; having a branch, permanent establishment, or having employee, representative or go-between to carry on business in Thailand and thereby derives income or gain in Thailand. In the latter case, the CIT is calculated from their net taxable profits arising from, or in consequence of, their business carried on in Thailand.
There are the requirements to fulfill the corporate compliance obligation. For example, the Half-Year Corporate Income Tax Return (PND.51) which is to be lodged and paid to the Revenue Department within 2 months starting from the last day of the sixth month of the accounting period (not required in the first accounting period), and the Annual Corporate Income Tax Return (PND.50) within 150 days starting from the last day of accounting period.
On the other hand, foreign companies not carrying on business in Thailand (i.e. non-resident) but receiving certain types of assessable income such as interest, dividends, service fees, royalties, profit remitted, will be subject to a certain percentage of withholding tax.
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