If your company has its fiscal year ending on 31/12, you have to submit your mid-year corporate income tax return (PND51) within the end of August (i.e. within 2 months from the first 6 months of the fiscal year).
The mid-year corporate income tax is a prepayment of your annual corporate income tax (PND 50) and is calculated on the forecasted net profit for the year. The mid-year tax paid can be used as a credit against the income tax due at year end.
For instance, your company’s fiscal year runs from 1st January to 31st December. As at 30th June, it has generated THB 500,000 in net profit and you estimate the total net profit at year end to reach THB 1,500,000.
1. The company is categorized as SME (i.e. paid-up capital not exceeding THB 5 million & revenues not exceeding THB 30 million / fiscal year). The mid-year corporate income tax due shall be calculated as follows:
THB 1,500,000 / 2: THB 750,000
THB 750,000 * CIT rates for SMEs
= Mid-year Corporate Income Tax: THB 67,500
Annual corporate income tax due at year end: THB 180,000 – THB 67,500 = THB 112,500
2. The company is not categorized as SME. The mid-year corporate income tax due shall be calculated as follows:
THB 1,500,000 / 2 = THB 750,000
THB 750,000 * 20% (CIT rate)
= Mid-year Corporate Income Tax: THB 150,000
Annual corporate income tax due at year end: THB 300,000 – THB 150,00 = THB 150,000
If the company underestimates its year end profit by 25% or more, there is a penalty equal to 20% of the amount of underestimated tax payable. Using the above example and should your net profit reach THB 3,000,000 instead of the forecasted THB 1,500,000:
THB 3,000,000 / 2 = THB 1,500,000
THB 1,500,000 * 20% (CIT rate)
= Mid-year Corporate Income Tax: THB 300,000
Underestimated tax payable: THB 150,000 and the company shall pay a surcharge of THB 30,000 (THB 150,000 * 20%).
Instead of paying the surcharge, your accountant is likely to suggest you to re-submit the PND51 form instead and pay the penalty for late submission at 1.5% of the amount of tax payable per month since additional mid-year corporate income tax * 1.5% * x months shall be lower than underestimated tax payable * 20%. Using the above example:
1. Paying the surcharge: THB 30,000
2. Submitting additional mid-year corporate income tax
Underestimated tax payable: THB 150,000
Penalties: THB 150,000 * 1.5% * 9 months = THB 20,250