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Business Taxes in Thailand

Business taxes in Thailand are as important as your business license while in Thailand as you will need this for your Thai work permit application. Note that certain occupations in Thailand are prohibited to foreigners. There is a long list of these business listed here.

The tax issues are mainly corporate taxes, VAT registration and personal income taxes. These are listed below but always seek advice from a bookkeeper in Thailand for more advice.

VAT Registration:

Before you start your business you will need to ensure that you have completed (Form VAT 01) which will register your company for VAT in Thailand. This can also be done within 15 days of operating. The application must be made in the area where you operate. As an example if you are in Bangkapi then you have to register for VAT at the Bangkapi tax office.  If you have more than one branch then you will only need to register in the area where the head office of your business is located. The vat needs to be paid monthly on (Form VAT 30) and it needs to be paid within 15 days of the new month. Your bookkeeper in Thailand will normally do this for you. Note that the VAT certificate will be needed when you reapply for your work permit in Thailand.

Income Tax:

Your business taxes need to be paid normally your bookkeeper or accountant will pay this before the due date. This is normally paid with your VAT returns which would be within 15 days of the following month. The Business tax rates in Thailand are based on a 12 month accounting period. Company taxes of based on nett profit and there are generous deductions which can be applied for. These include 200% for R&D if you are a large company or nett losses from the 5 accounting period before. You need to take advice on this and other deductions which may be applicable. Company taxes are Net profit <1 million baht = 15% and this is where most small businesses in Thailand fall in.

Withholding Taxes:

If you pay a supplier of services then a certain percentage of what you pay them has to be handed over to the government. This will mainly depend on the services. As an example if you pay for advertising then 2% of the value needs to be paid to the government. The supplier will apply for this later which is not your problem. There is a penalty for late payments as it normally gets paid before the end of the following month.

Business Taxes in ThailandTax Examples:

If you pay rent for your business of say 125,000THB. The withholding taxes are 5% for rent. That means that 6,250THB gets paid to the government, 8,750 THB gets paid as VAT and the supplier or landlord only gets 127,500THB as rent.

If you are starting a business then also see the articles on business licenses in Thailand as well as registering a business in Thailand for more information.

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