Setting up a business in Thailand requires registration with the Department of Revenue to obtain a Tax Identification Number. Certain types of businesses must also register with the VAT system.
Corporate Income Tax (CIT) registration – within the first two months of beginning operations, a company must register with the Revenue Department for corporate income tax purposes, and obtain a tax number and ID card.
The corporate tax rate is generally 30 percent of a company’s net income. Two returns must be filed with the Revenue Department annually. The first return is filed two months after the end of the first six months of a company’s tax year. Half of the estimated taxes projected for the full year must be paid when this return is filed. The second, and final, return is filed within 150 days of the end of a company’s tax year. When this return is file the total remaining tax due must be paid.
Value Added Tax (VAT) registration – a company having a gross income of 300,000 baht or more in a single month or 1,800,000 baht or more per year must register with the VAT system if it sells goods or supplies services that are liable to VAT. A company must also register for VAT if it imports goods. VAT returns are filed monthly. The amount of VAT payable each month is typically the amount of VAT collected less the amount of VAT paid to others. At this time the VAT rate is 7 percent.
Some types of services are VAT exempt and there are others that are zero-rated. Businesses that are not required to register with the VAT system may still do so voluntarily. This would be suitable for a zero-rated business that wishes to reclaim input VAT, for example.