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Income Tax in Thailand

Thai companies must pay income tax on all their income, regardless of the country of receipt. Foreign companies pay tax on profits derived from sources in Thailand. Profits from the sale of assets are included in the total taxable income.

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Corporate income tax

The tax rate is divided into small and medium-sized businesses (SMBs) and businesses other than SMBs.

The criteria for classifying a company as a small and medium-sized business (SMB) are authorized capital within 5,000,000 baht and an annual income of no more than 30,000,000 baht. All other companies are classified as large, and a different tax rate applies to them.

Tax rate for SMB companies

The tax rate for small and medium-sized business is calculated as follows:

- The first 300,000 baht net income is tax free (0%)

- On net Income from 300,001 baht to 3,000,000 baht, will have to pay a 15% tax - Net Income from 3,000,001 baht and more will be taxed at a 20% rate.

Net Income (baht) Tax rate payable
300,000 exemption from tax
300,001 - 3,000,000 15%
3,000,001 and above 20%
Table of tax rates for small and medium-sized businesses (SMBs)

Business tax rates other than SMBs

For such businesses in Thailand a flat rate applies.

Net profits of 1 baht or more will be taxed at 20%.

Example for Calculating Corporate Income Tax in Thailand

Consider three examples for calculating business tax, namely:

- loss-making financial result;

- net profit less than 300,000 baht;

- net profit over 300,000 baht.

In all three cases, an example of taxation for small and medium-sized businesses (SMBs) will be given.

Example 1: Loss-making financial result

First, let us model the results of business operations for the whole year as follows: - Annual Income is 1,000,000 baht; - Expenses for the whole year were 1,200,000 baht; - Tax of 100,000 baht was paid during the year.

The preliminary information shows that the expenses exceed the Income, so we lost 200,000 baht.

In the case of a loss-making business, regardless of the type of business, no tax is paid, and a refund of tax paid of 100,000 baht can be requested .

Example 2: Net profit less than 300,000 baht

The business operations model for the year is as follows: - Annual Income is 1,000,000 baht; - Expenses for the entire year are 800,000 baht; - Tax was paid during the year of 100,000 baht.

In the case of profit, it is necessary to divide the calculation of tax rates into 2 types, that is, for SMEs and non-SMEs.

In the first case (SMEs), no tax is paid on net income exceeding 300,000 baht for SMEs. The company has a net gain of 200,000 baht, based on the formula annual income - expenses for the whole year = net Income.
During the year, we paid 100,000 baht in taxes (based on the simulated data), so we can get a refund of 100,000 baht.

Example 3: Net profit over 300,000 baht

The model for this option looks like this:

- Annual Income is 1,300,000 baht;

- Full year expenses are 700,000 baht;

- Tax was paid during the year 100,000 baht.

The net Income will be 1,300,000 - 700,000 = 600,000 baht. This amount is taxed at 15% or 600,000 * 0,15 = 90,000.

During the year, the tax was paid 100,000 baht, i.e. overpayment of 10,000 baht. For this amount, the company can get a refund of the overpaid tax.

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Update: 18-02-2023
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