DOING BUSINESS IN THAILAND

Posted By Romain Ponsot on Oct 6, 1907 in Doing Business


Date de publication : 06-10-1907

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The following information are for the sole purpose  of providing a general overview of  the local taxation of the Corporate tax aspects of the country. In any case, the information provided below cannot be considered as comprehensive or deemed to constitute specific legal advice.

 

Yes we tax in Thailand

 

Flash News

New tax reform: No specific information

New tax treaties: No specific information

Local tax advisors

No specific information on the local tax advisors.

Useful links

Website Tax administration: Click here

Permanent Establishment

There is no definition of Permanent Establishment under the domestic tax law.

Resident companies are taxed on their worldwide income (« worldwide principle »). However, non-resident companies are only taxed on their revenues derived from Thailand sources (« source principle »).

Entities are considered to be resident for tax purposes in Thailand if they are incorporated in Thailand.

Note: the definitions of permanent establishment and place of residence are subject to the relevant provisions of any applicable double tax treaty, if any.

Corporate Income Tax

The general CIT tax rate is 20%.

Non-taxable income includes the following:

  • Certain dividends received from qualifying participations
  • Certain capital gains deriving from qualifying participations

Non-deductible expenses includes the following:

  • Dividends

Carry forward: Yes 5 years, but some restrictions may apply.

Carry back: No

Companies should submit the tax return annually within 5 months following the accounting year.

Annual tax returns are established by the company on a self-assessment system.

Companies shall pay 2 advance payments; and the balance must be paid at the time when filing the returns.

Whithholding Taxes (payment to foreign companies)

The local tax rates in Thailand are the following, subject to the provisions of an applicable double tax treaty, if any.

There is a 10% WHT on the profits paid from a branch to its foreign head office.

The general rate of WHT on dividends is 10% of the gross amount.

The general rate of WHT on interest is 15%.

The general rate of WHT on Royalties is 15%.

The general rate of WHT on management fees is 15%.

The general rate of WHT on technical services is 15%.

Capital gains

Generally, capital gains are taxed under the regular CIT as general income.

Note: capital gains deriving from qualifying participations are exempt under the participation exemption.

VAT

Standard VAT tax rate is 7%.

Zero-rated supplies include, subject to certain conditions:

  • exports of goods;
  • Export of services;

Exempt supplies include, subject to certain conditions:

  • No specific information

Note: exempt transactions differ from zero-rated transactions in that the input VAT associated with exempt transactions is not deductible.

 

In case where for a tax period, Input VAT exceeds Output VAT non resident companies may not apply for a refund.

No other specific information of VAT in Thailand.

Miscellaneous

The general statute of limitation is 10 years starting at the end of the year in which the tax return had to be filed.

The statute of limitation may be reduce to 5 years if the tax return is incomplete or incorrect.

There is foreign exchange control in Thailand. In certain cases payment of dividends or profits abroad may require approval of the Bank of Thailand.

There are no thin capitalization rules in Thailand. However from a legal point of view, the amount of interest could not be exceeding 7 times the taxpayer’s net equity.

 

 

 

Do not hesitate to share your experience in Thailand with us in the comments below. Any comments are welcome !

 

Romain Ponsot

Romain est conseiller en fiscalité au sein d’un leader mondial du shipping. Grâce à son expertise tant en matière de TVA, fiscalité internationale, problématiques intragroupe qu’en matière de fiscalité des particuliers, Romain vous guidera au travers d’articles professionnels et humoristiques. 

Romain, poète dans l’âme, aime particulièrement le couscous et passe beaucoup de temps à glacer ses souliers. Profil LinkedIn
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