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.