Three important things you must consider when you are to file CIT in Thailand such as;
- 50% of the calculated income tax is paid by the end of the eighth month.
- A return should be filed followed by the audited financial statement.
- On failing to pay the tax 20% of the deficit must be fined.
Now comes the most challenging part, which is calculating the corporate tax in Thailand. For that you must know what to include and exclude in the Corporate Income Tax calculation;
What to Include and Exclude when Calculating CIT Tax- It is calculated from the company’s net profit.
- Revenues from or in consequence of the company operating a business in an accounting period are taken into account while deducting all expenses in relation to the condition stated by the Revenue Code.
- One-half of dividends received from the Thai companies by the Thai companies are likely to be excluded from the taxable income. Nevertheless, the full amount may be excluded if the recipient is listed on the Stock Exchange of Thailand, else own minimum of 25% of the company’s capital interest.
Deductions when calculating CIT are;
- Ordinary and important expenses including,
- 200% deduction of Research and Development expense,
- 200% deduction of job training expense, etc.,
- Bad debts
- Wear and tear
- Provident fund contributions
- Entertainment expenses, rising up to 0.3%
- Taxes, aside Corporate Income Tax and Value Added Tax (given to the government)
- Interest, except the interest on the company’s capital reserves
- Donations up to 2% of the net profits
Deductions from Net Profits;
- Personal gifts and donations for a charitable purpose
- Reserves
- Service fee
- Fine or surcharge
- Part of the shareholder’s salary
- Funds, except PF
- Pay for assets, which a company/juristic partnership own
- Value of assets apart from devalued assets that are subject to 65 Bis, etc.,
Once the calculation is done, the tax payments must be made along with the tax returns. The companies sending funds out of Thailand should pay the tax based on the sum disposed within seven days right from the date of disposal. A foreign company not carrying out business in Thailand is subjected to file a flat tax rate. The payer, on the other hand, should withhold tax when making payment. Well, if you feel that this isn’t a cup of your tea, tax experts are there to assist.
