Thai Financial Reporting Standards: Guidelines for Annual Compliance

Posted by Reading Time: 4 minutes

Annual reporting and compliance deadlines are rapidly approaching in Thailand, and it is imperative that invested firms maintain an up to date understanding of current regulation. With this in mind, the following excerpt from our latest ASEAN Briefing Publication, Annual Audit and Compliance in ASEAN, provides an overview on how to ensure compliance with Thai Financial Reporting Standards (TFRS). 

TFRS vs IFRS

Thai Financial Reporting Standards (TFRS) are word-by-word aligned with IFRS (Bound Volume 2015), except for the industry-specific financial instrument standards. However, the Federation has announced the following upcoming updates:

  • IFRS will be adopted by the Federation one year after its effective day. For example, IFRS bound volume 2015 will became effective
in Thailand on January 1, 2016; IFRS bound volume 2016 will become effective in Thailand on January 1, 2017.
  • Additionally, regarding financial instrument standards, the Federation plans for full adoption to be effective in 2019, but it plans to encourage early adoption prior to 2019.

In addition to TFRS, there is a process for accepting a new set of accounting standards for SMEs that is identical to the IFRS for SMEs (amendment 2015). The new standards will be known as Thai Financial Reporting for SMEs (TFRS for SMEs) and are expected to come into effect in 2017.

Currently, SMEs in Thailand are allowed to use one of the two following standards:

  • Thai Accounting Standards (TAS)
  • Thai Accounting Standard for Non-Publicly Accountable Entities (NPAEs)
Professional Service_CB icons_2015 RELATED: Accounting and Reporting Services from Dezan Shira & Associates

 

Required Annual Reports 

Limited companies, both public and private, should provide the following document at the end of each accounting period:

  • Audited financial statement
  • Balance sheet
  • Profit and loss accounts
  • List of shareholders, as of the date of the meeting
  • Minutes of the annual meeting

For reporting purposes companies must prepare their documents in the Thai language. While foreign companies may prepare their documents in a language other than Thai, a translation must be attached.

 

Required Auditor

Financial statements must be examined and certified by an independent certified auditor. This should be done regardless of whether the company is traded or not. The only exception to this rule is the financial statements of a registered partnership under Thai law, whose total capital, assets, and income are not more than that prescribed in Ministerial Regulations.

Related-Reading-Icon-Asean Link RELATED: Annual Audit and Compliance in ASEAN

 

Compliance Timeline

Private and public limited companies must have their financial statements audited at the end of the fiscal year by an independent auditor. The board of directors must then approve the audited documents during a general meeting within four months of the end of the fiscal year. The approved documents must then be submitted to The Ministry of Commerce (MOC) within one month of the shareholder meeting.

Foreign companies operating a branch office, representative office, or regional office in Thailand must submit their audited financial statements within five months or 150 days of the end of the fiscal year. Approval of documents by shareholding meeting is not required for these entities. Failure to comply with these regulations may result in a penalty up to THB 100,000 (approximately US$3,000).

Screen Shot 2016-02-09 at 2.05.14 PMThis article is an excerpt from the latest issue of ASEAN Briefing, titled “Annual Audit and Compliance in ASEAN“,  in which we look at the different audit and compliance regulations of five of the main economies in ASEAN. We firstly focus on the accounting standards, filing processes, and requirements for Indonesia, Malaysia, Thailand and the Philippines. We then provide similar information on Singapore, and offer a closer examination of the city-state’s generous audit exemptions for small-and-medium sized enterprises.

Related-Reading-Asean Book Title

Tax, Accounting, and Audit in Vietnam 2014-2015
The first edition of Tax, Accounting, and Audit in Vietnam, published in 2014, offers a comprehensive overview of the major taxes foreign investors are likely to encounter when establishing or operating a business in Vietnam, as well as other tax-relevant obligations. This concise, detailed, yet pragmatic guide is ideal for CFOs, compliance officers and heads of accounting who need to be able to navigate the complex tax and accounting landscape in Vietnam in order to effectively manage and strategically plan their Vietnam operations.

An Introduction to Tax Treaties Throughout Asia
In this issue of Asia Briefing Magazine, we take a look at the various types of trade and tax treaties that exist between Asian nations. These include bilateral investment treaties, double tax treaties and free trade agreements – all of which directly affect businesses operating in Asia.

 

 

The 2015 Asia Tax ComparatorAB 1214 Cover small small
In this issue, we compare and contrast the most relevant tax laws applicable for businesses with a presence in Asia. We analyze the different tax rates of 13 jurisdictions in the region, including India, China, Hong Kong, and the 10 member states of ASEAN. We also take a look at some of the most important compliance issues that businesses should be aware of, and conclude by discussing some of the most important tax and finance concerns companies will face when entering Asia.