All companies deriving income from business operations in Thailand are required to file tax returns and make tax payments to the Department of Revenue twice each year. Branches of foreign companies conducting business in Thailand are subject to the same requirements as companies incorporated in Thailand.
The dates for filing returns and making tax payments are based on a company’s fiscal year or accounting period. A company can choose any 12-month period as its fiscal year, but once this has been established with the Revenue Department it can be changed only by formal approval.
A company having its accounting period the same as the calendar year (January to December) is required to file its mid-year tax return and pay any tax due by the end of August.
At Juslaws & Consult, our Accounting and Auditing group provides clients with mid-year tax return preparation and filing services.
Taxes accompanying the filing of the mid-year return are based on one-half of either the actual or estimated profits for the year, depending on the nature of the company’s business. The amount of tax paid with the filing of the mid-year return is credited against the full amount of tax payable on the company’s annual tax return.
Thai companies are allowed to claim a foreign tax credit for taxes paid abroad on income that is subject to corporate income tax. The credit cannot exceed the amount of tax that is payable on the income, however.
If a company underestimates its annual net profits by more than 25 per cent on its mid-year tax return, a surcharge of 20 per cent on the amount of tax underpaid is levied.