Taxable Entities
Corporate Income Tax (CIT) is paid by partnerships and companies incorporated in Thailand as well as by foreign companies carrying on business in Thailand and/or deriving income from Thailand such as dividends, service fees, or interests.
Tax Calculation
For partnerships and companies registered in Thailand, CIT is calculated on the company’s net profit, being the sum of total revenues less total deductible expenses. Non-deductible expenses include but are not limited to:
- Expenses without sufficient supporting documents (e.g. missing invoices/receipts)
- Funds contribution (except to registered provident funds)
- Personal expenses and gifts
- Value-Added Tax (VAT) except when the taxpayer is not registered to VAT
- Corporate Income Tax
- Fines and other penalties resulting form late submission of taxes
- Fictional expenses
The CIT rate is 20% of the company’s net profit, unless the company is categorized as ‘Small and Medium-sized Enterprise (SME)’ as follows:
Conditions:
1. Paid-up capital not exceeding THB 5 million
2. Revenues not exceeding THB 30 million / fiscal year
| Net profit | Tax Rate |
| ≤ THB 300,000 | 0% |
| THB 300,000 – 3,000,000 | 15% |
| ≥ THB 3,000,000 | 20% |
Mid-Year Corporate Income Tax
Companies must also submit their mid-year Corporate Income Tax return (PND51 form) based on their forecasted net profit for the full year. The mid-year Corporate Income Tax paid can be used as a credit against the Corporate Income Tax due at year end.
Example:
Let’s say your company’s fiscal year runs from 1st January to 31st December. As at 30th June, it has generated THB 2,000,000 in net profit and you estimate the total net profit at year end to reach THB 5,000,000. The company is not categorized as SME. The mid-year Corporate Income Tax due shall be calculated as follows:
THB 5,000,000 / 2 = THB 2,500,000
THB 2,500,000 * 20% (CIT rate)
= Mid-year Corporate Income Tax: THB 500,000
Submission & Penalties
Corporate Income Tax return (PND50 form) must be submitted within 150 days from the year end date. The fine for late filing is up to THB 4,000 and there is also a surcharge of 1.5% of the amount of tax payable per month.
Mid-year Corporate Income Tax return (PND51 form) must be submitted within 2 months from the first 6 months of the fiscal year (i.e. within 31st August if the fiscal year is 1st January to 31st December). The fine for late filing is up to THB 2,000 and there is also a surcharge of 1.5% of the amount of tax payable per month. If the company underestimates its year end profit by 25% or more, there is also a penalty of 20% of the amount of underestimated tax payable.