Corporate Income Tax
The Corporate Income Tax (CIT) is a direct tax levied on juristic entities carrying on business in Thailand or deriving income from Thailand.
The CIT therefore applies to entities incorporated under Thai law, as well as to foreign entities conducting business in Thailand or receiving income paid from or in Thailand which is subject to CIT under the Thai Revenue Code.
Tax deductibility of expenses
The taxable income of a juristic entity is computed by deducting expenses incurred for the sole purpose of business from all revenue generated (business income, dividends, interests, royalties, etc…) in the same accounting period.
However, the deductibility of expenses and allowances must comply with rules prescribed by the Thai Revenue Code:
Deductible expenses
| Expenses incurred for the ordinary course of business |
| Depreciation of assets not exceeding the percentage of costs specified by the Thai Revenue Code. |
| Entertainment expenses up to 0.3% of, the higher of revenue or paid-up capital in the limit of 10 million baht. |
| Donations of up to 2% of net profits. |
| 200% deduction of job training expenses. |
| 200% deduction of Research and Development expense. |
| Net losses carried forward from the last five accounting periods |
Non – deductible expenses
| Personal expenses |
| Gifts to third parties |
| Tax penalties, fines |
| Non documented disbursements |
| Damages claimable from an insurance |
| Expenses related to a prior accounting period |
| Withholding tax absorbed on behalf of vendors |
How to calculate your CIT?
The CIT is calculated on the company net profits, i.e all revenue deducted by allowable expenses, to which the below tax rates apply:
| Taxpayer | Tax base | Rate (%) |
|---|---|---|
| Small company * | Net profit not exceeding 300,000 bahtNet profit from 300,000 not exceeding 3 million bahtNet profit over 3 million baht | Exempt15%20% |
| Other companies | Net profit | 20% |
How to submit your CIT?
Companies subject to CIT have the obligation to file their half year tax return (PND.51) within 60 days from the last day of the first 6 months of the ongoing accounting period (e.g by August 31st if the accounting period is ending 31st December), and to file their annual tax return (PND.50) within 150 days from the closing date of the previous accounting period (e.g by May 31st if the accounting period is ending 31st December).
N.B:
| In case of understatement of the half year tax liability, a surcharge of 20% of the due tax amount can be imposed. | |
| In case of a late filing of the annual income tax return, a monthly surcharge of 1.5% of the due tax amount will be imposed. |
