Filing Corporate Income Tax in Thailand: A Guide for Foreign Investors

Companies operating in Thailand generally must file corporate income tax returns with the Thai Revenue Department, including foreign-owned subsidiaries and branches of foreign companies. The standard corporate income tax rate is 20 percent of net taxable profits, although reduced rates and tax incentives may apply to qualifying businesses.

Who must file corporate income tax in Thailand?

Thai-incorporated companies are generally subject to corporate income tax on their worldwide taxable profits, regardless of whether their shareholders are Thai or foreign.

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Foreign companies may also have filing obligations depending on their activities in Thailand.

The main categories include:

• Thai-incorporated companies: Wholly or partly foreign-owned subsidiaries generally must submit annual corporate income tax returns.
• Foreign companies conducting business in Thailand: Foreign companies operating through branches or other taxable business arrangements are generally subject to corporate income tax on profits attributable to their Thai business activities.
• Foreign companies receiving Thailand-sourced income: Certain payments to foreign companies without a taxable business presence may instead be subject to withholding tax rather than ordinary annual corporate income tax filing.

Companies generally must file annual corporate income tax returns even if they report losses or have no taxable profits.

Corporate income tax rates and calculation in Thailand

Companies qualifying for Thailand’s SME tax rates must generally have paid-up capital not exceeding THB 5 million (US$155,000) at the end of the accounting period and annual revenue from goods and services not exceeding THB 30 million (US$932,000).

Other companies generally pay the standard 20 percent rate. Certain Board of Investment (BOI)-promoted projects may qualify for corporate income tax exemptions or reductions.

How is corporate income tax calculated?

Companies calculate taxable profits by adjusting their accounting profits for:

• Non-deductible expenses.
• Eligible tax deductions and allowances.
• Qualifying tax losses carried forward, generally for up to five years.
• Applicable BOI tax incentives.

For instance, a foreign-owned company subject to the standard 20 percent rate reports:

The resulting tax liability is THB 1.9 million (US$59,000), before eligible withholding tax credits and half-year payments. The calculation assumes the carried-forward losses qualify for deduction and no additional incentives apply.

Corporate income tax filing deadlines in Thailand

Companies subject to corporate income tax on net profits generally file the following returns:

Companies filing electronically may qualify for an additional eight days. Deadlines may also be adjusted for public holidays.

Any outstanding annual corporate income tax must be paid by the applicable deadline. Companies whose advance payments exceed their final liability may qualify for a refund.

Half-year corporate income tax filing

Most companies required to submit P.N.D. 51 estimate their annual taxable profits and calculate half-year tax on half of that estimate.

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Certain businesses, including listed companies and specified financial institutions, calculate half-year tax using actual profits from the first six months.

Companies whose first or final accounting period is shorter than 12 months are generally exempt from this filing requirement.

Half-year tax payments are credited against the final annual liability.

How to submit corporate income tax returns in Thailand

Companies can submit P.N.D. 50 and P.N.D. 51 through the Thai Revenue Department’s electronic filing system. Annual filings generally require financial statements and supporting tax calculations, while companies with qualifying related-party relationships and annual revenue exceeding THB 200 million (US$6.2 million) must generally submit a transfer pricing disclosure form. This requirement can apply even if no related-party transactions occurred during the accounting period.

Companies must separately submit their financial statements to the Department of Business Development (DBD), which has its own filing deadlines.

Penalties for late or incorrect corporate income tax filing

Companies that fail to meet their corporate income tax obligations may face:

• Late filing: A fine of up to THB 2,000 (US$62) for failing to submit an annual return by the prescribed deadline.
• Late payment: A surcharge of 1.5 percent per month or part of a month on outstanding tax, subject to the statutory limit.
• Incorrect reporting: Additional tax assessments and applicable penalties for underreported income or unsupported deductions.

Companies that underestimate their annual taxable profits by more than 25 percent without reasonable cause may also face a surcharge of 20 percent of the relevant half-year tax amount where the statutory conditions under the P.N.D. 51 rules are met.

Contact Dezan Shira & Associates for corporate tax compliance in Thailand

Dezan Shira & Associates assists foreign investors with corporate income tax calculations, filing, accounting, and financial reporting in Thailand. Contact us for assistance with your company’s corporate tax compliance requirements.

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