Are you already doing business in Thailand? Or are you planning to do so? In any or both of these cases, you must know about Half Yearly Account Auditing in Thailand.
There are various additional risks associated with your business when you are carrying it out in a foreign land. As a foreign investor, you can receive tax deductions and reductions. But, to be eligible for that, you must keep your business account books transparent and true.
To be transparent and true in your books of accounts, the first thing which you should do is hire local accounting services in Thailand. The second most important activity which can keep your business going is to file for taxes on time and be honest with the Royal Thai Government. You can never apply for tax payments or file tax returns until you get your accounts audited.
STEPS: Half-Yearly Account Auditing in Thailand
As the first step, either you can hire local accounting services or teams in Thailand or train your in-house accounting team in Thai Standards.
Secondly, give access to your business dealings, transactions and projections to the accounting team, be it outsourced or in-house.
Thirdly, instruct your accounting team to maintain the journals, ledgers and books of accounts according to Thai standards and do verify their activities frequently.
Next, stay updated on the tax payment and return schedule of Thailand. You can never afford to miss the payment date as that may attract fines and penalties ruining your financial goodwill.
And finally, get all the accounting reports of your business signed by a Certified Public Accountant (CPA) of Thailand.
Before signing your accounting statements, the CPA verifies all the records of transactions and accounts stringently. Your accounts are audited in this step.
MUST KNOWS: Half-Yearly Account Auditing in Thailand
Your business must follow the Thailand Financial Reporting System (TFRS) in conducting its accounting operations and bookkeeping. The Thailand Revenue Department accepts no other format of accounting except this.
The tenure of the half-yearly account auditing is January-June and July-December every year. This year, due to the COVID-19 impact some relaxations in the deadline has been announced, but rules are the same.
Your business must estimate its annual net profit and tax liabilities and pay it within two months after its completion of six months. You will pay half the amount of tax estimated at this time.
Prepayment of any tax amount is creditable against its annual tax liability. This means that the half-yearly tax amount which you pay is adjusted from the total payable amount calculated at the end of the fiscal year.
If you try to pay less half-yearly tax by forecasting lower annual profit or underestimating it, it can bother you in the year-end. If your forecast is more than 25% lower than the calculated annual report, you would be liable to pay 20% extra on the difference amount.
DOCUMENTS: Half-Yearly Account Auditing in Thailand
You have to produce the following documents at the end of each accounting period:
- Company registration or incorporation documents informing the name of the company and the type of business it does;
- Details of the Directors including their personal, financial and social credentials;
- Audited Financial Statements of business during the reporting accounting period;
- Balance sheet, Profit and Loss Statement of all accounts associated with the business;
- Minutes of the Annual General Meeting;
- List and details of shareholders attending the Annual General Meeting.
To get the Audited Financial Statements, you have to submit the following documents to a Certified Public Accountant of Thailand:
- Statement of estimation of expected income and expense of your business in the current fiscal year;
- Government receipts and the form PND 1, 3, 53; PP 30, 36; Por Tor 40, and Social Fund for the respective accounting period;
- Statement of the actual sales and expenses available from the start of the accounting period till the date available at the time of audit;
- The annual audit report of the previous accounting year and/or accounting period comprising of Financial Statement, Auditor Report, PND 50 including General Ledger, Trial Balance and Assets Register;
- Bank statement of every corporate account including savings and current type of accounts;
- Inventory (if any) and stock cards;
- Lease agreement and/or copy of any title deed the company might have acquired when purchasing land;
- Seal of your business or company;
- Half-yearly report (PND 51)
Your Take!
The list, process or requirements of half-yearly account auditing little confusing or tough. The major reason behind that is that you are not a Thai national. And that is quite natural that a single peep in the guidelines or legal instructions can never provide you full knowledge and confidence of any foreign law.
So, to ease your task, you can always hire premium accounting, bookkeeping and taxation firms of Thailand like Konrad Legal. Konrad Legal is working in this segment for the last two decades with a consistent 99% client retention rate. Simply mail your query or requirement to officer@konradlegal.com and we will take care of the proceedings.