Accounting & tax compliances in Thailand
Accounting compliance obligations
Small and medium-sized enterprises (SMEs) in Thailand often face challenges related to accounting, which if left unaddressed, can destabilize financial operations and hinder growth.
Identifying and overcoming these common pitfalls is essential for maintaining accurate financial records and ensuring regulatory compliance, improving financial insight, and facilitating informed decision-making.
In this informative guide, we will discuss frequent accounting challenges encountered by Thai SMEs and provide expert guidance to help you successfully navigate these issues and maintain financial stability. Additionally, discover how Narai Partners’ professional accounting services can play a crucial role in assisting SMEs to avoid and resolve such challenges, supporting everything from basic bookkeeping to advanced financial analysis and ensuring compliance with Thai accounting standards. Equip your business with the knowledge and tools necessary to avoid these common accounting pitfalls and maintain a solid financial foundation.
Accounting regulations in Thailand
The accounting regulations established in Thailand are referred to as the Thailand Financial Reporting Standards (TFRS). These standards comprise a set of guidelines mandatory for the preparation and presentation of financial statements for entities held publicly accountable.
For entities not subject to public accountability (NPAEs), the TFRS for NPAEs are enforced. Nevertheless, NPAEs have the option to choose the application of TFRS.
Small and medium-sized enterprises (SMEs) have the choice between two accounting standards:
- TFRS
- TFRS for NPAEs
Both TFRS and TFRS for NPAEs are formulated based on the International Financial Reporting Standards (IFRS).
Furthermore, international companies have the option to adopt the IFRS Standards.
What constitutes a non-publicly accountable entity?
A non-publicly accountable entity is defined as an entity that does not fall under the following categories:
- Entities with equity instruments or bonds listed on a public market (whether domestic or foreign, including stock exchanges or over-the-counter markets), or entities in the process of providing financial statements for securities-related purposes.
- Entities primarily engaged in the fiduciary role of holding assets for a wide range of external parties, including but not limited to financial institutions, insurance companies, securities firms, and mutual funds.
- Publicly traded companies.
- Any additional entities that might be designated in the future.
Necessary accounting adherence criteria for Thai companies
Closure of the financial year for Thai firms
As a standard, the financial year-end for enterprises operating in Thailand is set as 31 December.
The accounting duration encompasses 12 months; nevertheless, companies that are recently established, companies in their dissolution year, or those that have modified their accounting approach could potentially have an accounting period shorter than 12 months.
Companies possess the option to alter their accounting period. To proceed, a formal request must be submitted, and an official endorsement from the Director General of the Revenue Department needs to be obtained.
Bookkeeping prerequisites
One prevalent challenge faced by SMEs in Thailand is maintaining accurate and complete bookkeeping records. Financial transactions, including sales, purchases, and expenses, should be recorded promptly and consistently to ensure precise financial reporting. Inaccurate bookkeeping can lead to several issues, such as:
- Misleading financial statements that obscure the company’s financial health
- Inability to meet regulatory compliance requirements and the risk of penalties
- Difficulty in tracking cash flow, identifying trends, and making informed decisions
To avoid these pitfalls, SMEs should adopt the following best practices:
- Implement a reliable bookkeeping system, either manual or using accounting software, to record transactions in a consistent format.
- Train employees responsible for bookkeeping on proper recording procedures, the importance of consistency, and essential financial concepts.
- Consider outsourcing bookkeeping to a professional accounting service, such as Narai Partners to ensure accuracy and compliance with Thai standards.
Yearly financial reports
Financial statements serve as documented records that communicate a company’s operational undertakings and fiscal accomplishments. Government agencies, accountants, enterprises, and others often subject these financial statements to audits to ensure precision, particularly for taxation, funding, or investment reasons.
The financial statements of a Thai corporation encompass:
- Statement of financial position
- Profit and loss statement
- Statement of changes in equity
- Cash flow statement
- Notes accompanying the financial statement
The notes accompanying the financial statement must encompass the following details:
- Framework governing the formulation of financial statements
- Elucidation of accounting methodologies
- Supplementary data concerning the balance sheet, income statement, cash flow statement, and statement of changes in equity.
Yearly audit of financial reports
All corporations are obligated to formulate financial statements, which must undergo an audit and receive certification from an independent certified auditor at the conclusion of the fiscal year, regardless of the company’s trading status.
The auditor’s perspective on the financial statements is indispensable, as the audit opinion is a prerequisite when submitting both the financial statements and tax returns.
For both private and public limited companies, the board of directors holds the responsibility of arranging an annual shareholders’ meeting for the endorsement of audited documents within four months following the fiscal year’s conclusion. These approved documents, accompanied by supporting records such as the shareholder list, are to be presented to both the Revenue Department and the Commercial Registrar within one month post the shareholder meeting. Non-compliance with these regulations may lead to penalties of up to 200,000 THB.
Additionally, public limited companies are also mandated to publish the balance sheet in a newspaper for at least one day, within a month of its approval at the shareholders’ meeting.
In the case of foreign companies (branch offices, representative offices, or regional offices), submission of a financial statement copy to the Ministry of Commerce (MOC) is required within 150 days following the fiscal year’s end. There’s no necessity for shareholder meeting approval in this context.
Yearly reports
At the close of every accounting cycle, both private and public limited companies are obliged to furnish the subsequent documents:
- Audited financial statement
- Balance sheet
- Company name
- Directors’ particulars
- Roster of shareholders
- Minutes of the annual meeting
- Profit and loss accounts
- Business category
It is mandatory for these documents to be formulated in the Thai language.
Foreign enterprises have the option to compose their documents in a foreign language; however, an attached Thai translation is requisite.
Insufficient Financial Analysis and Reporting
Comprehensive financial analysis and reporting are vital for business growth and informed decision-making. SMEs often face difficulties in generating accurate, up-to-date financial reports due to limited resources or expertise. Inadequate financial reporting can hinder a company’s ability to assess its performance, identify potential issues, and capitalize on growth
opportunities. To overcome these challenges, SMEs can:
- Implement financial reporting processes, including standardized report templates and data collection protocols.
- Regularly review and analyze financial statements, such as balance sheets, income statements, and cash flow statements, to assess the company’s financial health.
- Monitor key performance indicators (KPIs) and financial metrics to identify trends, potential issues, and growth opportunities.
- Seek consultation and support from professional accounting services to ensure financial reporting accuracy and insights into the company’s financial performance.
Tax compliance obligations
Tax compliance obligations
- Corporate Tax
- Corporate income tax
- VAT
- Withholding Tax
- Special business tax
- Land & buildings tax
- Personal income tax
- Inheritance Tax
- Gift tax
Financial Reporting Standard in Thailand
Thailand has embraced the International Financial Reporting Standards (IFRS), encompassing not only the IFRS Standards but also the International Accounting Standards (IAS), interpretations from the International Financial Reporting Interpretations Committee (IFRIC), and interpretations from the Standing Interpretations Committee (SIC). These comprehensive standards are known as the Thai Financial Reporting Standards (TFRS). TFRS is essentially a localized adaptation of the IFRS Standards, typically taking effect one year after the corresponding IFRS Standards. Furthermore, businesses have the option of adopting TFRS before their mandatory implementation date.
Mandatory compliance with TFRS is stipulated for Publicly Accountable Entities (PAEs), which notably includes publicly listed companies. PAEs are obligated to adhere to these standards when preparing their financial reports and disclosures.
Financial Statements
In Thailand, all types of legal entities, including juristic companies, partnerships, branches of foreign companies, and joint ventures, are required to prepare financial statements for each accounting period. These financial statements must undergo an audit conducted by a certified auditor. However, there is an exception for the financial statement of a registered partnership established under Thai law, provided that its total capital, assets, and income do not exceed the thresholds specified in Ministerial Regulations. The audit results are to be certified by the company’s auditor, approved by the shareholders, and subsequently submitted to both the Commercial Registration Department of the Ministry of Commerce (MOC) and the Revenue Department of the Ministry of Finance (MOF).
For a private limited company in Thailand, the director bears the responsibility of convening the annual shareholders’ meeting with the objective of obtaining approval for the company’s audited financial statement. This meeting is required to occur within a timeframe of four months following the conclusion of the fiscal year. Following the approval at the shareholders’ meeting, it is mandatory for the director to submit the audited financial statement along with its accompanying documents, including a roster of shareholders as of the meeting date, to the Registrar. This submission should take place no later than one month after the date of the shareholders’ meeting.
When it comes to a foreign company operating as a branch office, representative office, or regional office in Thailand (excluding joint ventures), the responsibility for submitting a copy of the financial statement to the Registrar falls on the Manager of the branch office. This submission should be made within 150 days after the conclusion of the fiscal year. Importantly, it should be noted that the approval of a shareholder meeting is not a mandatory requirement for this submission in the case of foreign companies.
In the case of a public limited company in Thailand, the director is tasked with the responsibility of organizing the annual shareholders’ meeting. This meeting is convened to obtain approval for the company’s audited financial statements and should take place within four months from the end of the fiscal year.
Following the approval at the shareholders’ meeting, the director is required to take the following actions:
- Certify a copy of the audited financial statement and the annual report.
- Provide a copy of the minutes of the shareholder meeting that approved the financial statement.
- Submit these certified documents, along with a list of shareholders as of the meeting date, to the Registrar. This submission should occur no later than one month after the approval at the shareholder’s meeting.
Additionally, the company is obliged to publish the balance sheet in a newspaper for public information. This publication should span at least one day within one month of the date when it was approved at the shareholder’s meeting.
Thai Revenue Code
Transfer Pricing & Double Tax Agreements (DTA)
Transfer Pricing regulation in Thailand
In 2018, Thailand introduced specific transfer pricing provisions into the income tax law, which apply to accounting periods that started on or after 1 January 2019.
The transfer pricing rules adopt the arm’s-length principle. Revenue officers have the power to uplift or reduce taxpayers’ revenue and expenses to the arm’s-length price. Where transfer pricing adjustments result in a tax shortfall, a secondary adjustment that arises from imposing tax on a constructive transaction, either in the form of a deemed dividend or deemed loan, would also apply.
The legislation also requires mandatory annual transfer pricing reporting for taxpayers belonging to a group of companies. Entities with an annual total revenue of THB 200 million or less are exempt from the transfer pricing information reporting requirements.
There are two levels of transfer pricing information reporting, as follows:
- Partial disclosure: Applicable taxpayers are required to complete a transfer pricing disclosure form to be submitted online to the Revenue Department at the time of filing the annual tax return.
- Full disclosure: Applicable taxpayers are also required to prepare full transfer pricing documentation to be maintained for five years from the date of filing the transfer pricing disclosure form. This includes the local file and the master file for larger entities and is to be submitted to the Revenue Department within a prescribed time period (normally 60 days) from the date of the request.
A penalty of up to THB 200,000 for each level of transfer pricing reporting will be imposed in the case where taxpayers fail to comply with the reporting requirements (by way of inaccurate or incomplete disclosure of information).
The detailed content requirements of the transfer pricing documentation were issued on 30 September 2021 and are applicable for accounting periods that started on or after 1 January 2021. The new content requirements are largely in line with those suggested by the OECD local file requirements. However, transfer pricing documentation must be submitted in the Thai language. It also remains unclear whether Thailand’s transfer pricing documentation now only comprises the local file as there is no mention of the master file.
The content requirements apply to entities for the financial year starting on or after 1 January 2021, but the reporting requirements have been in place since 1 January 2019. What this means is that, for the financial years starting between 1 January 2019 to 31 December 2020, taxpayers may follow either Thailand’s internal guidelines on transfer pricing (Departmental Instruction Paw. 113/2545) when preparing transfer pricing documentation or the OECD local file requirements.
The Revenue Department will use the transfer pricing disclosure form to select audit targets. Once selected, they will request the full transfer pricing documentation for review. In the case where the transfer pricing practices adopted by the taxpayer do not comply with the arm’s-length principle, Revenue officers will make the necessary adjustments and assess additional taxes, surcharges, and penalties.
Although smaller entities with revenue of THB 200 million or less are exempt from the transfer pricing information reporting requirements, they will still be obligated to ensure that their transfer pricing practices are at arm’s length.
Thailand also introduced the country-by-country reporting (CbCR) requirements to be applicable for accounting periods starting on or after 1 January 2021. Multinational enterprises (MNEs) with total consolidated revenues exceeding THB 28 billion carrying on business in Thailand are required to file the CbC report in Thailand if they do not meet the local filing exemption conditions. The Revenue Department also allows a foreign company to designate a Thai entity to be its surrogate parent entity and file a CbC report on behalf of the group, with certain conditions to be met.
The CbC report is required to be filed online within 12 months from the financial year-end in the case where the ultimate parent entity of a Thai MNE is the filing entity and within 60 days upon request in the case where the filing entity falls under the local filing conditions. Each MNE group operating in Thailand and meeting the CbCR threshold must select a representative entity to file a CbC notification online with the Revenue Department.
A fine of THB 2,000 will be imposed on a taxpayer that fails to file the CbC report by the due date.
The transfer pricing rules endorse the use of five transfer pricing methods in determining the arm’s-length compensation for a controlled transaction, which are the comparable uncontrolled price, resale price, cost plus, transactional net margin, and transactional profit split methods.
Other pricing methods may only be used in cases where it can be proven that the five endorsed methods are inappropriate. When another method is adopted, taxpayers must provide written notification to the Director-General of the Revenue Department of the other method within the fiscal period in which it is to be used. Taxpayers are also required to prepare supporting documentation to justify the use of the other method, which should be ready for submission to the Revenue officers upon request.
The regulation on transfer pricing adjustments also provides brief guidelines for benchmarking whereby internal comparables (i.e. the same or similar transactions that a taxpayer has with unrelated parties) must be considered before external comparables (i.e. the same or similar transactions between independent third parties).
There remains some ambiguity around the interpretation of ‘relationship’ and ‘control’ under the definition of ‘related parties’ in the main provision. We expect to see more guidance on this interpretation in the pending subordinate regulation.
The Revenue Department will still be able to assess tax on transfer pricing irregularities for periods that started before 1 January 2019 as the statute of limitations in this case is five years. For those periods, the general income tax provisions, which require taxpayers to transact at market price, would be referred to. The transfer pricing documentation should then follow the requirements under the Departmental Instruction Paw. 113/2545 and be prepared and submitted upon request on a voluntary basis.
Thailand accepts bilateral advance pricing agreements (APAs) and limits the period covered to a maximum of five accounting periods. Only a company or partnership incorporated in Thailand that enters into intra-group transactions with affiliates who are residents of Thailand’s treaty partners may apply for an APA.
Information found on : https://taxsummaries.pwc.com/thailand/corporate/group-taxation
Double Tax Agreements
What is a double tax agreement?
Double taxation arises when the same declared income is subjected to taxation in two or more distinct jurisdictions. This situation commonly occurs when an individual or a company conducts business or resides in multiple countries. The issue of double taxation is typically alleviated through bilateral double tax agreements between nations, which ensures that the income is taxed only once.
In cases where an individual generates income in Thailand but lacks a permanent establishment within the country, there is an exemption applied to income from business profits. Specifically, only interest, dividends, and royalties are liable to taxation in the country where the income is generated if no permanent establishment exists.
Furthermore, double tax agreements can lead to reduced or exempted withholding taxes on payments of income to foreign juristic entities that are not actively engaged in business operations within Thailand. These agreements serve to mitigate the impact of double taxation and promote international cooperation in tax matters.
What is a permanent establishment?
In Thailand, a permanent establishment refers to a specific place or presence where a person or entity conducts business activities. Permanent establishments are important for tax purposes as they determine whether a person or entity is subject to taxation in Thailand. The definition of a permanent establishment in Thailand includes various types of physical locations and projects. Here’s a breakdown of what constitutes a permanent establishment and what does not:
Permanent Establishments in Thailand:
- A place of management
- A branch
- An office
- A factory
- A warehouse, specifically when used to provide storage facilities for others
- A workshop
- A farm
- An oil or gas well, a mine, a quarry, or any other place involved in the extraction of natural resources
- A building site, construction, installation, or assembly project where these activities continue for more than six months
Not Considered Permanent Establishments:
- The use of facilities for storage
- The display or delivery of goods or merchandise owned by the company
- The maintenance of a stock of goods or merchandise owned by the company for the purpose of storage, display, or delivery.
- The maintenance of a stock of goods or merchandise owned by the company for processing by another.
- The maintenance of a fixed place of business for the purpose of purchasing goods or merchandise or collecting information for the company.
- The maintenance of a fixed place of business for advertising, supplying information, conducting scientific research, or similar activities.
To conclude, a permanent establishment in Thailand encompasses physical locations where substantial business operations take place. It’s a crucial factor in determining tax liabilities for entities operating across borders. Activities that are purely ancillary or related to storage and display, among others, are generally not considered permanent establishments for tax purposes.
Who can benefit from DTAs?
The DTA applies to both individuals and juristic persons of a contracting state to mitigate the impact of double taxation. To qualify for the treaty benefits and be considered a Thai resident for tax purposes, the person must meet one of the following criteria:
- An individual who stays in Thailand for at least 180 days during a tax year.
- A legal entity incorporated under the Civil and Commercial Code of Thailand.
What taxes are covered?
The taxes covered by the double taxation agreement are income taxes, i.e. personal income tax, corporate income tax and petroleum income tax.
Indirect taxes such as value added tax and specific business tax are not covered by the agreement.
Types of exempt income
Double taxation elimination methods
Different double tax agreements outline various methods for eliminating double taxation for individuals based on their respective countries.
These methods include the exemption method and the credit method:
- Exemption Method: Under this method, the country of residence refrains from taxing income that, as specified in the double tax agreement, is already subject to taxation in the source country. In essence, it exempts the income from being taxed in the resident country if it has been taxed in the source country.
- Credit Method: This method allows the resident country to tax income that has already been taxed in the source country. This involves calculating the tax based on the taxpayer’s total income, which includes income from both countries as per the double tax agreement. However, it provides for a deduction from the resident country’s tax liability for the tax already paid in the source country. This method helps prevent double taxation by providing credit for taxes paid abroad.
The choice of method and the specific rules for its application can vary depending on the terms and provisions outlined in each individual country’s double tax agreement. These agreements are designed to ensure that individuals do not face double taxation on the same income when it crosses international borders.
Mutual agreement procedure
The mutual agreement procedure is a dispute resolution procedure provided for in the double taxation agreement.
The Minister for Finance has authorized the Director General of the Revenue Department to be the competent authority under the double taxation agreement.
A taxpayer can initiate a Mutual Agreement Procedure (MAP) by submitting a written request in Thai to the Revenue Department. This request should include the following information:
- Identification and contact details of the person making the request, including their name, address, and tax identification number.
- Identification of other individuals or entities affected by the request.
- If the request is being submitted by an authorized person, a power of attorney should be provided.
- Details of the other countries involved in the dispute.
- Comprehensive information about the facts and circumstances of the case.
The periods during which double taxation or taxation not in accordance with the provisions of the relevant double tax agreement occurred. - Detailed information about the actions that led to double taxation or taxation not in accordance with the double tax agreement, either already occurred or anticipated.
- An analysis and supporting reasons explaining why the taxpayer believes that the actions of one or both of the contracting states result in taxation that doesn’t comply with the double tax agreement.
- Information on any steps taken to avoid double taxation in Thailand or in other countries.
- Details on any remedies sought in Thailand or in the other country.
- A statement confirming the accuracy and completeness of all information and documents in the MAP request, along with a commitment to provide additional information as requested by the competent authority.
- Any additional information that could assist in resolving the case.
The MAP request must be submitted to the Revenue Department within the time limit specified in the double tax agreement, which is typically either two or three years from the date of the first notification of the action resulting in taxation not in accordance with the agreement’s provisions.
Which countries have a double tax agreement with Thailand?
VAT
VAT in Thailand
What is VAT?
Who is subject to VAT in Thailand?
- Individuals or entities engaged in the supply of goods or services within Thailand are liable for VAT if their annual revenue surpasses THB 1.8 million.
- For services, the location of provision determines whether they fall under Thai VAT regulations. A service is considered to be rendered within Thailand if it is performed within the country, irrespective of its utilization location. Similarly, if a service is conducted outside Thailand but utilized within the country, it is subject to Thai VAT.
- Importers are also subjected to VAT in Thailand. The Customs Department collects VAT at the time of goods importation.
VAT rates in Thailand
Presently, the prevailing VAT rate in Thailand stands at 7%.
However, the 0% VAT rate is applicable to the following scenarios:
- Export of goods
- Services provided within Thailand but utilized outside the country
- International transport services offered via aircraft or sea vessels
- Sales of goods and services to Thai government ministries, departments, or state enterprises as part of foreign loan assistance programs
- Sales of goods and services to international organizations
- Sales of goods and services to foreign economic and trade offices
- Transactions involving goods or services between bonded warehouses and businesses in export processing zones or duty-free zones
Activities exempted from VAT
- Sales and imports of unprocessed agricultural products and related items like fertilizers, animal feeds, and pesticides.
- Sales and imports of newspapers, magazines, and textbooks.
- Certain fundamental transactions, including:
- Domestic and international land transportation.
- Healthcare services from both government and private hospitals, as well as clinics.
- Educational services from government and private schools and recognized educational institutions.
- Professional services like medical, auditing, legal services in court, and similar regulated professional services.
- Income from business, commerce, agriculture, industry, transport, or other activities not mentioned above.
- Cultural services such as amateur sports, services from libraries, museums, and zoos.
- Services involving labor employment, research, technical services, and public entrepreneur services.
- Goods exempted from import duties under the Industrial Estate law and imported into an Export Processing Zone (EPZ), as well as under chapter 4 of the Customs Tariff Act.
- Imported goods kept under Customs Department supervision that will be re-exported and entitled to an import duties refund.
- Other services such as religious and charitable services, and services provided by government agencies and local authorities.
How VAT is calculated?
The calculation of VAT follows this formula : VAT liability = Output tax – Input tax.
The VAT system in Thailand operates in the following manner: Consider company A (subject to VAT) purchasing fabrics from company B (also subject to VAT). In this case, company A accumulates VAT credits, while company B accumulates VAT debits. If company A (let’s assume it produces clothing) subsequently sells these clothes to a distributor, it incurs VAT debits. At the end of the month, the VAT debits and credits are balanced. If there are credits remaining, the company can seek a VAT refund (a process that can be time-consuming). Conversely, if there are debits outstanding, the corresponding amount must be paid.
In Thailand, VAT returns (Form PP 30) are required to be submitted on a monthly basis, no later than the 15th of the following month, to the respective Area Revenue Branch Office. It’s important to note that if goods or services are also subject to excise tax, the VAT return should be filed with the Excise Department concurrently with the excise tax filings. Monthly VAT returns must be filed even if there is no activity for that particular month. The payment of VAT is also due at the same time as the filing of the return.
When to file and pay VAT returns?
The VAT return (Form VAT 30) needs to be submitted and the payment made to the Area Revenue Office within 15 days of the subsequent month. When a taxpayer operates multiple places of business, each establishment must file a return and settle the payment separately, unless the taxpayer has received approval from the Director-General of the Revenue Department for a consolidated approach.
For services used within Thailand and supplied by service providers located in other countries, VAT is applicable in Thailand. Service recipients in Thailand are obligated to submit Form VAT 36 and make the tax payment on behalf of the service providers.
In instances where the provision of goods or services is also subject to excise tax, the VAT return and payment should be submitted to the Excise Department concurrently with the excise tax return and payment, within 15 days of the ensuing month. In cases involving imported goods, the VAT return and payment must be submitted to the Customs Department at the time of import.
VAT non-compliance penalties
- A fine not exceeding THB 2,000 when a VAT registrant fails to:
- Submit a tax return.
- Notify changes in VAT registration particulars.
- Notify a change in the place of business.
- Notify temporary business cessation.
- Provide a certified copy of a tax invoice, credit note, or debit note.
- A fine not exceeding THB 5,000 when a VAT registrant fails to:
- Display the VAT registration certificate.
- Notify the opening or closing of an additional place of business.
- Notify the transfer or receipt of a transfer of business.
- Notify business cessation or business transfer.
- A fine not exceeding THB 10,000, a sentence not exceeding one month, or both, in the following cases:
- A businessperson conducting business without required VAT registration.
- A VAT registrant failing to issue or provide a tax invoice as required.
- A businessperson registered for temporary VAT registration issuing a tax invoice not in accordance with specified rules.
- An agent issuing tax invoices on behalf of a VAT registrant not following prescribed rules.
- A fine not exceeding THB 10,000, a sentence not exceeding six months, or both, in these cases:
- An agent of an abroad-residing VAT registrant issuing tax invoices without approval.
- A VAT registrant using a cash register machine without approval.
- A VAT registrant failing to report output tax, input tax, and goods/raw materials (if the registrant engages in goods sales) as prescribed by the Director-General.
- A fine ranging from THB 2,000 to THB 200,000 and a sentence ranging from three months to seven years:
- A VAT registrant attempting to evade VAT by issuing unauthorized tax invoices, debit notes, or credit notes.
- A VAT registrant attempting to evade VAT by failing to issue authorized tax invoices, debit notes, or credit notes, or their substitutes.
- A VAT registrant attempting to evade VAT through false, fraudulent, or similar actions.
How to register for VAT?
An individual or company that is obligated to pay VAT needs to register by completing and submitting Form VAT 01. This registration should take place either prior to commencing business operations or within 30 days after their income crosses the threshold. The submission is to be made to the respective Area Revenue Office in the case of businesses located in Bangkok, or to an Area Revenue branch office if the business is located elsewhere.
For applicants with multiple offices, the submission of the application should be directed to the Revenue Office nearest to the location of the main office.
How to claim VAT refunds?
In scenarios where the input tax surpasses the output tax on a monthly basis, the taxpayer has the option to request a VAT refund in either cash or tax credits that can be utilized in subsequent months.
For taxpayers subject to zero-rated VAT, a VAT refund is consistently applicable.
Unused input tax can be offset against output tax within the subsequent six months. However, it can only be claimed within a three-year window from the date of filing.
Change in VAT policies
The standard rate of VAT in Thailand, as specified by section 80 of the Revenue Code, is 10%. However, on September 23, 2020, the Thailand VAT Royal Decree (No.715) BE 2563 was introduced, which extended the VAT rate of 7% for a period of 12 months, concluding on September 30, 2021.
Starting from October 1, 2021, the sales and imports of goods and services in Thailand will be subject to the 10% VAT rate.
Tax Invoice
Inadequate invoice management can lead to cash flow issues and revenue losses, particularly when funds go uncollected due to delayed invoicing or overlooked invoice follow-ups. To optimize invoice management and minimize such risks, SMEs should:
- Establish a standardized invoicing process, including templates, documentation, and filing practices.
- Implement a strict timeline for sending invoices to clients, following up on outstanding invoices, and resolving invoice disputes.
- Utilize invoicing software to automate billing processes and improve efficiency.
- Consider engaging a professional accounting service to handle invoice management, allowing SME owners to focus on other vital business operations.
What is tax invoice?
A tax invoice is issued to request for payment of the service and then a tax invoice is issued on receipt of payment.
Invoice requirements for VAT
For VAT purposes, an invoice should contain the following information:
- The words “tax invoice”
- Supplier’s name, address, and taxpayer identification number
- Purchaser’s name and address
- Date of issuance
- Description, type, category, quality, and value of the goods or services
- VAT amount for the goods or services
- Serial number of the tax invoice
Inconsistent invoice management
Inadequate invoice management can lead to cash flow issues and revenue losses, particularly when funds go uncollected due to delayed invoicing or overlooked invoice follow-ups. To optimize invoice management and minimize such risks, SMEs should:
- Establish a standardized invoicing process, including templates, documentation, and filing practices.
- Implement a strict timeline for sending invoices to clients, following up on outstanding invoices, and resolving invoice disputes.
- Utilize invoicing software to automate billing processes and improve efficiency.
- Consider engaging a professional accounting service to handle invoice management, allowing SME owners to focus on other vital business operations.
Withholding tax
Withholding tax in Thailand
Withholding tax is an essential aspect of taxation in Thailand and can be complex due to the different types of payments subject to withholding tax and the associated rates. A good understanding of your obligations as a taxpayer and the processes involved in withholding tax is essential in order to comply with Thai tax legislation and avoid potential penalties.
This guide aims to give you an overview of withholding tax in Thailand, including the different categories of payments subject to withholding tax, the applicable tax rates and the procedures for remitting withholding tax to the relevant authorities. Whether you are a new business owner or an international company establishing a presence in Thailand, this guide will provide you with the knowledge you need to navigate the intricacies of withholding tax in the country.
What is withholding tax?
The withholding tax refers to the practice of deducting a certain portion of tax from payments issued to service providers or suppliers. The rates of withholding tax can fluctuate based on the nature of the income and the residency status of the recipient.
What expenses are liable to withhold tax?
- Expenses exceeding THB 1,000.
- Expenses below THB 1,000, provided there exists a long-term contract arrangement (such as telephone or internet bills).
What are withholding tax rates?
| Service | Withholding tax rate |
|---|---|
| Interest | 1% |
| Transportation | 1% |
| Non-life insurance premiums | 1% |
| Advertising | 2% |
| Royalties | 3% |
| Professional services | 3% (paid to a Thai or foreign company having a permanent branch in Thailand) 5% (paid to a foreign company not having a permanent branch in Thailand) |
| Telephone | 3% |
| Rent | 5% |
| Prizes | 5% |
| Dividends | 10% |
Dividends paid to another Thai company may be exempt from withholding tax if specific conditions are met under the Revenue Code or the Investment Promotion Act.
Dividends paid to a non-resident company or individual are also subject to a 10% withholding tax, which may be reduced under a tax treaty.
Interest paid to a non-resident company or individual is subject to a 15% withholding tax, unless this can be reduced under a tax treaty.
Royalties paid to a non-resident company or individual are subject to a final withholding tax of 15%, which may be reduced under a tax treaty.
When is withholding tax due?
Companies that withhold tax on behalf of other firms, employees, or entities are responsible for submitting the withheld tax to the Revenue Department during the initial seven days of the subsequent month following the payment date.
What are the submission penalties?
If tax returns are not submitted to the Revenue Department by the due date, there will be consequences. A fine of THB 100 is imposed during the initial seven days after the deadline, and it increases to THB 200 after the first seven days have passed. Furthermore, an additional penalty of 1.5% of the unpaid amount will accrue each month.
Withholding Tax on dividends
Dividend payments to shareholders, regardless of whether they are individuals living within the country or non-residents, are subject to a 10% withholding tax.
Similarly, corporate shareholders situated outside of Thailand are also subjected to a 10% withholding tax on dividends. However, it’s worth noting that Thai resident corporate shareholders might be eligible for a dividend tax exemption, contingent upon meeting certain conditions.
Withholding Tax on capital gains
- Capital gains resulting from the sale of investments in or from Thailand by a foreign company not engaged in business activities within Thailand are subject to a 15% tax. This tax is typically withheld at the source by the purchaser, unless an exemption is applicable under a Double Taxation Treaty (DTT).
- The following types of gains are also subject to a 15% withholding tax for foreign companies not conducting business in Thailand:
- Gains arising from the difference between the redemption price and the initial sale price of bonds issued by the government, state enterprises, and specified institutions.
- Gains made from the transfer of bonds issued by the government, state enterprises, and specified institutions.
- Capital gains from the sale of fund units in a fixed income mutual fund are exempt from tax for both Thai companies and foreign companies conducting business in Thailand. However, this exemption is contingent on the condition that the cost of the investment and related expenses related to this tax-exempt income are not claimed as tax-deductible expenses.
Personal Income Tax & Corporate Income Tax
Personal Income Tax in Thailand
This guide provides an overview of the key topics relating to personal income tax in Thailand, essential knowledge for both employees and employers.
Thai tax residents are legally obliged to fulfil their annual personal income tax payment and reporting obligations. As a taxpayer, it is essential to understand your tax responsibilities.
What is Personal Income Tax?
Personal income tax in Thailand is levied on an individual’s income stemming from the following sources:
- Benefits or gains received in Thailand, whether in cash or in kind (received either within or outside Thailand).
- Income from foreign sources that is brought into Thailand within the tax year.
Income earned by non-residents is only subject to personal income tax if the benefits are received within Thailand.
What are the different types of taxable income?
Taxable income in Thailand is classified into eight distinct categories:
- Income derived from employment
- Income arising from the hire of labor, employment office, or services
- Income originating from goodwill, copyright, franchise, patents, or similar rights
- Income derived from sources such as interest, dividends, investor bonuses, gains related to mergers, acquisitions, or dissolution of a company/partnership, and gains from share transfers
- Income generated through property leasing
- Income derived from liberal professions
- Income attained from a work contract that includes the supply of essential materials (excluding tools)
- Income arising from business, commerce, agriculture, transportation, or any activity not previously mentioned.
As indicated in the fourth point, capital gains in Thailand are subject to taxation at the regular income tax rates, treating them as ordinary income. In line with the practice in many countries, capital losses cannot be used to offset capital gains.
However, there are three exceptions to the general taxation of capital gains:
- Income from wages and salary, encompassing employer-provided benefits (such as income from stock options, personal income tax paid and absorbed by the employer, living allowances, and the monetary value of rent-free accommodation), with the exclusion of business travel expenses and medical treatment.
- Capital gains on the sale of non-interest bearing government bonds or debt instruments, although certain exceptions may apply.
- Capital gains on the sale of government bonds.
These exceptions provide certain relief or exemptions from the standard taxation of capital gains in specific situations.
What are the personal income tax rates?
What are the available deductions and allowances?
Taxpayers may deduct the lump sum or actual expenses from income received as follows:
How to fil the income tax return?
In Thailand, the tax year for personal income tax follows the calendar year, ending on December 31. Taxpayers are required to complete their tax filings and payments by March 31 of the following year. This can be done using the PND 90 or PND 91 forms. Personal income tax returns can be submitted either in paper form or online.
Additionally, for income derived from specific sources, including property rental, liberal professions, and income falling under category (8), taxpayers are obligated to file a half-yearly tax return by September 30. These taxes can be used as tax credits at the end of the tax year, potentially offsetting the overall tax liability.
What are the penalties and surcharges for late or inaccurate filing?
A person who submits inaccurate tax returns may face penalties of 100% or 200% of the tax owed in the case of failing to file a tax return. However, if the taxpayer submits a written request and the assessment officer determines that there was no intention to evade tax and the taxpayer cooperated during the tax audit, the penalty may be reduced by 50%.
Furthermore, individuals who fail to pay their taxes within the specified time may be subject to a surcharge of 1.5% per month or a fraction of the tax amount due, excluding the tax itself. If the Director General extends the payment period and the tax is paid within the extended period, the surcharge may be reduced to 0.75% per month or a fraction thereof.
Finally, individuals who knowingly or willfully provide false information, make false statements, provide false answers to questions, or submit false evidence to evade taxes or attempt to evade taxes may be sentenced to imprisonment for a period of three months to seven years and may also face a fine of THB 200,000. It is crucial to comply with tax regulations and provide accurate information to avoid these penalties and legal consequences.
Tax clearance certificate
Individuals falling under certain categories in Thailand are required to obtain a tax clearance certificate:
- Those who owe taxes or have outstanding tax payments before departing Thailand.
- Individuals responsible for filing tax returns and paying taxes on behalf of a foreign company or juristic partnership conducting business in Thailand.
- Public entertainers earning income in Thailand.
Foreigners must apply for a tax clearance certificate at least 15 days before their departure from Thailand. This certificate must be presented to the Immigration Office on the day of departure.
Failure to apply for a tax clearance certificate can result in penalties, including a surcharge of 20% of the tax owed. Additionally, the individual may face fines of up to THB 1,000 or imprisonment for a period not exceeding one month, or both. It is essential to comply with these requirements to avoid such penalties and legal consequences.
Corporate Income Tax in Thailand
What is Corporate Income Tax
Corporate income tax is a direct tax imposed on legal entities such as companies or partnerships that engage in business activities within Thailand or generate specific categories of income from the country, even if the business is conducted outside Thailand.
It’s mandatory for all companies to acquire a Taxpayer Identification Number (TIN) within 60 days of incorporation. Foreign companies also need to obtain a TIN before they commence operations in Thailand. This identification number serves not only for corporate income tax but also for purposes related to withholding tax and Value Added Tax (VAT).
What are the types of taxable income?
- A company or juristic partnership formed under Thai law:
- Limited company
- Public company limited
- Limited partnership
- Registered partnership
- A company or juristic partnership incorporated under foreign laws if it:
- Conducts business within Thailand
- Conducts business both within and outside Thailand, including within Thailand
- Engages in carriage of goods or passengers both within and outside Thailand
- Employs an employee, agent, or intermediary for conducting business in Thailand and receives income or profits in Thailand
- Does not conduct business in Thailand but receives assessable income as specified in section 40 (2)(3)(4)(5) or (6) of the Revenue Code, paid from or within Thailand
- Distributes profits from business conducted in Thailand to other countries
- A commercial or profitable business operated by a foreign government, an organization of a foreign government, or any other juristic entity established under foreign law.
- Incorporated and unincorporated joint ventures.
- A foundation or association involved in revenue-generating business, excluding those mentioned in section 47 (7)(b).
- A juristic entity determined as a company or juristic partnership by the Minister and approved by publication in the Royal Thai Government Gazette.
What are the corporate income tax rates?
| Taxpayer | Rate |
|---|---|
| Small company (a company with a paid-up capital of less than THB 5 million at the end of each accounting year) |
|
| Companies listed in the Stock Exchange of Thailand (SET) | 20% |
| Companies newly listed in the Market for Alternative Investment (MAI) | 20% |
| Companies newly listed in the Stock Exchange of Thailand | 20% |
| Foreign companies not carrying on business in Thailand but receiving other types of income apart from dividends from Thailand | 15% |
| Banks deriving profits from International Banking Facilities (IBF) | 10% |
| Foreign companies not carrying on business in Thailand but receiving dividends from Thailand | 10% |
| Foreign companies disposing profit out of Thailand | 10% |
| Foreign company engaging in international transportation | 3% |
| Profitable association and foundation | 2% or 10% |
Deductions
The Board of Investment (BOI) in Thailand offers tax incentives for various economic activities falling within the following categories:
- Agriculture and Agricultural Products
- Chemicals, Paper, and Plastics
- Electronic Industry and Electrical Appliances
- Light Industry
- Mining, Ceramics, and Basic Metals
- Metal Products, Machinery, and Transportation Equipment
- Services and Public Utilities
- Technology Development and Innovation
These incentives are aimed at promoting investment in these sectors and can include tax holidays, reduced corporate income tax rates, import duty exemptions, and other benefits. Companies interested in these incentives should consult with the BOI to determine their eligibility and the specific incentives available for their activities.
The BOI incentives are divided into two groups called Group A and Group B.
Group A includes activities that can benefit from corporation tax incentives, import duty incentives on machinery and raw materials and other non-tax incentives.
Group B comprises businesses that benefit only from tax incentives on imports of machinery and raw materials and other non-tax incentives.
When must companies file and pay tax return?
Companies in Thailand, both Thai and foreign, have specific tax filing and payment obligations.
Corporate Income Tax Return (Form CIT 50): Companies engaged in business activities must file their tax returns and pay corporate income tax within 150 days from the end of their accounting periods.
Non-Business Entities: Entities not involved in active business operations but disposing of funds or profits from Thailand are also subject to corporate income tax. They must file and pay tax within seven days from the date of disposal using Form CIT 54.
Tax Prepayment (Form CIT 51): Companies in Thailand are required to estimate their annual net profit and tax liability and make a prepayment no later than two months after the first six months of their accounting periods.
Foreign Entities Receiving Income: Foreign entities receiving income from Thailand but not conducting business in the country are subject to tax, which the payer must withhold at the time of payment. The payer must file a return (Form CIT 54) and make the payment to the Revenue Department within seven days of the following month in which the payment is made.
It’s crucial for companies and entities to adhere to these tax filing and payment requirements to ensure compliance with Thai tax regulations and avoid potential penalties or legal consequences.
Penalties and surcharges
In the event of late submission of the annual tax return, a surcharge of 1.5% of the tax payable per month will be applied.
It should be remembered that non-payment of half-yearly tax may result in a surcharge of 20% of the unpaid tax.
Other Taxes
Land & buildings tax
Introduced on January 1, 2020, the Land and Building Tax in Thailand replaced the former “Local Maintenance Tax” and “Household and Land Tax”. This tax is designed to generate revenue from individuals who own land and property. It is essential for property owners in Thailand to understand their obligations and how this tax applies to their real estate assets.
What is land and buildings tax?
Who must pay land and buildings tax?
According to section 37 of the Land and Building Tax Act, the tax is applicable to the following categories of land or buildings utilized for these purposes:
- Agricultural purposes, including rice farming, crop farming, plantation, livestock farming, and aquatic animal farming.
- Residential purposes.
- Other purposes not including agricultural and residential uses.
- Land or buildings that remain vacant or unused
What are the land and buildings rates?
Land and buildings tax exemption
There are exemptions from the Land and Buildings Tax in Thailand based on the purpose of the land or building and the value of the tax base:
Agricultural Use: Land or buildings used for agricultural purposes are exempt from the tax base calculation if the total tax does not exceed THB 50 million.
Residential Use: Land or buildings used for residential purposes, with the owner’s name listed on the household registration certificate as of January 1 of the tax year, are exempt from the tax base calculation if the total tax does not exceed THB 50 million.
Residential Use (Building Only): If the owner of a building does not own the land and uses the building for residential purposes, and their name is listed on the household registration certificate on January 1 of the tax year, the owner is exempt from the tax base calculation if the amount does not exceed THB 10 million.
These exemptions provide relief for individuals and entities using their land or buildings for specific purposes and within certain value thresholds.
When is the tax due?
Where can the tax be paid?
- Municipality Office: For land or buildings located in municipal areas.
- Tambon Administrative Organisation: For land or buildings located within Tambon Administrative Organisation areas.
- Khet Office: For land or buildings located in the Bangkok Metropolitan Administrative area.
- Pattaya City Hall: Specifically for properties located in Pattaya.
- Office of any other local government organization as specified by the law for properties in that particular area.
Property owners should inquire with the relevant local government authorities to determine the specific payment location for their property.
Late submission penalties
If a taxpayer in Thailand fails to pay their Land and Buildings Tax on time, they may be subject to penalties and surcharges. Here’s how the penalties work:
- Written Warning: The local government organization will send a written warning to the taxpayer in May if they have unpaid tax. The taxpayer is required to pay the overdue tax along with penalties and surcharges.
- Penalty for Late Payment: If the taxpayer fails to pay the tax within the specified period, they are liable for a penalty payment of 40% of the overdue tax.
- Early Payment After Warning: If the taxpayer pays the tax before receiving the written warning, they are liable for a reduced penalty payment of 10% of the overdue tax.
- Payment After Warning: If the taxpayer pays the tax within the time specified in the written warning, they are liable for a penalty payment of 20% of the overdue tax.
- Surcharge: Taxpayers who fail to pay the tax within the specified period are also liable to pay a surcharge of 1% per month of the tax amount. Fractional months are counted as whole months.
It’s essential for property owners to pay their Land and Buildings Tax on time to avoid these penalties and surcharges.
Special Business Tax
What is Specific Business Tax?
Who is subjected to specific business tax?
The following entities are liable to SBT
- Banking institutions.
- Businesses engaged in finance, securities, and credit foncier activities.
- Entities conducting life insurance operations as governed by life insurance laws.
- Pawnbroking enterprises.
- Businesses with regular transactions akin to commercial banks, encompassing activities such as offering loans, extending guarantees, currency exchange, issuing, buying, or selling bills, and transferring funds abroad through various methods.
- Sales of immovable property conducted in a commercial or profitable manner.
- Sales of securities within a securities market.
- Any other business categories stipulated by royal decree.
What are the Specific Business Tax rates?
| Business | Tax rates |
|---|---|
| Banking, finance and similar business | 3% |
| Finance, securities and credit foncier business | 3% |
| Businesses with regular transactions similar to commercial banks | 3% |
| Life insurance | 2.5% |
| Pawn brokerage | 2.5% |
| Real estate | 0.1% |
| Sale of securities in a securities market | 0.1% (exempted) |
What businesses are exempted from specific business tax?
The SBT in Thailand exempts certain activities or businesses from its scope. These exempted activities include:
- Bank of Thailand, the Government Savings Bank, the Government Housing Bank, and the Bank for Agriculture and Agricultural Cooperatives.
- Industrial Financial Corporation of Thailand.
- A savings cooperative, but only in regard to loans provided to its members or to another savings cooperative.
- A provident fund under the law governing provident funds.
- National Housing Authority, but only concerning the sale or hire-purchase of an immovable property.
- Pawnbroking business of a ministry, sub-ministry, department, and a local government authority.
- Any other business as prescribed by a royal decree under section 91/2.
Where to submit specific business tax returns?
Businesses in Thailand are required to submit their SBT returns and pay taxes at designated locations based on their location. Here are the submission locations:
In Bangkok:
- Branch Area Revenue Office where the business is located.
- Other locations designated by theDirector-General of the Revenue Department as the place for filing and paying tax.
In Other Provinces:
- Submit the return at the Branch Area Revenue Office in the location where the business is established.
- Other locations that the Director-General of the Revenue Department authorizes as the place for filing and paying tax.
Gift Tax
What is the gift tax?
Gift tax is a form of personal income tax applicable to money or assets presented as gifts to parents, ascendants, descendants, spouses, or others, provided the value surpasses a specific threshold.
Assets or funds given as gifts that do not surpass the set threshold are exempt from gift tax.
Which donations are exempted from tax?
- Income from the transfer of immovable property received by a legitimate child, not exceeding THB 20 million within a tax year.
- Maintenance income or gifts received by ascendants, descendants, or a spouse, not exceeding THB 20 million throughout a tax year.
- Maintenance income or gifts received by an individual who is not an ascendant, descendant, or spouse, on occasions of tradition or custom, provided the value does not exceed THB 10 million within a tax year.
- Income from gifts received by an individual who intends to utilize the gift for education, religion, or public benefit purposes according to the donor’s intention, as specified in the Ministerial Regulations, and is exempt from personal income tax.
Gift tax calculation and tax return
The formula for calculating gift tax is:
The excess of THB 10 million or 20 million x tax rate (5%) = tax payable
The taxpayer must file the personal income tax return within 31 March of the following year. The taxpayer can choose to pay the tax at a rate of 5% in excess of the threshold or to combine it with other income.
Inheritance Tax
On 5 August 2015, Thailand introduced an inheritance tax as part of its efforts to create a fairer tax system. This tax is aimed at people who receive wealth from the estate of a deceased person. Its aim is to generate income from large inheritances and to contribute to the redistribution of wealth in society.
What is inheritance tax?
Inheritance tax was introduced on August 5, 2015, with the primary goal of enhancing the equity of the tax system by imposing taxes on individuals who acquire wealth through the inheritance of assets from a deceased individual’s estate.
Who is liable to pay tax when inheritance is received?
According to section 11 of the Inheritance Tax Act, the following individuals who inherit assets are obligated to pay the inheritance tax:
- Individuals holding Thai nationality.
- Natural individuals who are not of Thai nationality but possess a domicile in Thailand as defined by immigration regulations.
- Non-Thai individuals who receive an inheritance that comprises assets located within Thailand.
- Juristic entities that are registered in Thailand or established under Thai laws, or Thai shareholders who hold more than 50% of the registered and paid-up capital.
What are the Inheritance tax rates?
In the case that the inherited value surpasses THB 100 million, solely the segment exceeding THB 100 million is subjected to taxation.
For the surplus amount, the inheritance tax rates are as follows:
- 5% inheritance tax for parents and descendants.
- 10% inheritance tax for other beneficiaries.
Assets subject to inheritance tax
- Immovable property.
- Securities as defined by the Securities and Exchange Act.
- Deposited funds or other types of assets, where the heir possesses the authority to withdraw from a financial institution or demand from a deposit holder.
- A vehicle registered in the name of the heir.
- Financial assets specified by a Royal Decree.
How to calculate inheritance tax?
Asset valuation for inheritance tax purposes is established based on the price or value received at the time of acquiring these assets through inheritance, with the following guidelines:
For immovable property, the assessment is derived from the capital value of the property. This value is appraised specifically for the purpose of collecting fees related to the right and juristic act registration under the Land Code. It is then adjusted by deducting any third-party rights as specified by the criteria outlined in Ministerial Regulations.
In the case of securities that are traded on the Stock Exchange of Thailand, their value is determined by considering the closing price observed during the business hours of the stock exchange on the date when the inheritance is received.
For all other situations not covered by the above categories, the criteria for valuation are generally provided in Ministerial Regulations without specific details.
After the value of the inherited assets has been ascertained, whether or not you are subject to inheritance tax depends on whether the total asset value exceeds THB 100 million:
If the asset value does not surpass THB 100 million, you are not obligated to pay inheritance tax.
However, if the asset value exceeds THB 100 million, the inheritance tax rate will be applicable, and it will be either 5% or 10% based on the specific circumstances of the inheritance.
How to file for inheritance tax?
Those who receive an inheritance of more than THB 100 million must file an inheritance tax return and pay the tax within 150 days from the day of receiving the inheritance. The tax return can be printed from the Revenue Department’s website and submitted at the branch area revenue office.
Inheritance tax non compliance penalties
There are fines and criminal penalties if the declaration of inheritance is not filed or is not filed on time.
Stamp Duty Tax
Stamp duties are taxed on instruments and not on transactions or persons. For the purposes of stamp duty, an instrument is defined as any document chargeable with duty under the Revenue Code. The stamp duty rules are contained in Chapter VI of Title II of the Revenue Code.
Information found on : https://www.rd.go.th/english/21986.html
Persons liable to stamp duty
- Only instruments listed in the stamp duty schedule are subject to the stamp duty and the persons liable to pay stamp duty are those listed in column 3 of the schedule. They are, for example, the persons executing the instrument, the holders of the instrument or the beneficiary.
- If an instrument liable to duty is executed outside of Thailand, the first holder of the instrument in Thailand shall pay the duty by stamping at the full amount and canceling within 30 days from the date of receiving the instrument. If he does not comply as such, the instrument shall not be deemed duty stamped.
If he does not comply with the provisions of Paragraph 1, any holder of the instrument shall pay the duty by stamping at the full amount and canceling, and then he shall be able to submit the instrument for collection, endorsement, transfer or claiming of benefit.
Any holder who acquires possession of the instrument in accordance with this Section before the expiration of the time limit specified in Paragraph 1 may pay the duty by stamping at the full amount and canceling, and he has the right of recourse against the previous holders. - If a bill submitted for payment is not duty stamped, the recipient of the bill may pay the duty by stamping at the full amount and canceling, and may either have the right of recourse against the person liable to duty or deduct the amount of duty from the payment due.
Information found on : https://www.rd.go.th/english/21986.html
Instruments liable to Stamp Duty
The instruments liable to stamp duty include, inter alia, transfers of land, a lease, stock transfers, debentures, mortgages, life assurance policies, annuities, power of attorney, promissory notes, letters of credit, travelers cheques.
Information found on : https://www.rd.go.th/english/21986.html
How to duty stamped?
“Duty stamped” means
(1) in the case of an adhesive stamp, payment of duty is made by affixing a stamp on the paper, before or immediately when an instrument is executed, in an amount not less than the duty payable, and canceling such stamp; or
(2) in the case of an impressed stamp, payment of duty is made by using a paper with an impressed stamp in an amount not less than the duty payable and canceling such stamp, or by submitting an instrument to an official to impress the stamp and paying an amount not less than the duty payable and canceling such stamp; or
(3) in the case of payment by cash, payment of duty is made in cash in an amount not less than the duty payable in accordance with the provisions of this Chapter or in accordance with a regulation prescribed by the Director-General with the Ministers approval.
In stamping duty as prescribed under (1) and (2), the Director-General shall have the power to order the compliance in accordance with (3) instead
Information found on : https://www.rd.go.th/english/21986.html
Rate of Stamp Duty
Rates of stamp duty are given in the schedule attached to the Chapter VI of Title II of the Revenue Code. The rates of duty range from 1 Baht to 200 Baht.
You can find the detailed rate of stamp duty on the Revenue Department Site : https://www.rd.go.th/english/21986.html