Taxation & Revenue Codes

Companies Income tax is set at a flat rate of 30% on net profits. Normal business deductions relating to the cost of conducting business are permitted, as are depreciation allowances in calculation of net profit. Businesses must obtain an identification card from the Revenue Department within 60 days after incorporation or registration.

Capital gains are treated as ordinary income and are therefore subject to corporate income tax.

Corporate income tax is paid on a semi-annual basis. The first payment, 30% of one half of the whole year's estimated net profits is due within two months from the closing date of the first six months of the fiscal year. The second payment is remitted within 150 days from the last day of the financial year, and is calculated as 30% of the whole year's net profits, less tax already paid.

Foreign Companies are deemed to be conducting business in Thailand if they have an employee, agent, representative or go-between that is generating income in or from Thailand. The natural or juristic person working with or for the Foreign Company may be held liable for the foreign company's assessable income taxes.

Value Added Tax (VAT) is levied on sale of goods, rendering of services and import of goods & services at a rate of 10%. (Prior to 10 October 2001 it was 7%). A business with an annual projected turnover of 600,000 baht or more must register for Value Added Tax, unless specifically exempted.

Withholding taxes are levied on many forms of payments at a rate of 10% to 15%. This includes profits remitted from Branch offices to parent companies and Dividends (10%), Royalties (10%), loans payments and professional Fees (15%) paid to foreign companies not doing business in Thailand.

Stamp Duties are also payable on a range of transactions.

Personal income tax ranges are 5% - 37%. Unregistered Ordinary Partnerships are treated as natural persons for Tax purposes.

Foreign companies, whether carrying on business in Thailand for taxation purposes or not, may be exempted from taxation where a double taxation treaty exists. These treaties allow foreign companies that are not defined as having “Permanent Establishment” in Thailand to be exempt from paying income tax but not necessarily withholding tax.