Corporate Income Tax - Invest East

Corporate Income Tax is a direct tax levied on legal entities or partnerships that conduct business in Thailand or earn income from Thailand. The tax period is 1 year.

Taxpayers

The tax is paid by all companies registered in Thailand, both Thai and foreign.

Foreign companies are those incorporated under foreign law. A company becomes a taxpayer if it has a representative office or branch in the Kingdom. If a company does not conduct business in Thailand but receives income (such as service fees, dividends, interest, or rental income), this income is taxed on a gross basis and paid in the form of withholding tax.

Tax Rate

The maximum tax rate is 20%.

Companies with registered capital of less than 5 million baht and annual revenue from sales of goods or services not exceeding 30 million baht (small and medium-sized enterprises) are subject to progressive tax rates:

Taxpayer: Standard Company

Profit: Total taxable profit
Tax Rate: 20%

Taxpayer: Small Enterprise (SME)

Profit: 0 – 300,000 baht — 0%
Profit: 300,001 – 3,000,000 baht — 15%
Profit: Over 3,000,000 baht — 20%

Tax Base

The tax is calculated based on the company’s net profit using the accrual method. The company takes into account all income earned from business activities during the reporting period and deducts all expenses in accordance with the provisions of the Tax Code.

Deductible Expenses

The following expenses are taken into account when calculating tax:

Ordinary and necessary expenses. Special deduction rates apply to the following categories:
- 200% of research and development expenses;
- 200% of staff training expenses;
- 200% of expenses for providing equipment for persons with disabilities.
Interest expenses (excluding interest on reserve funds or company capital).
Taxes paid to the government, except for corporate income tax and value-added tax (VAT).
Net losses carried forward from the previous five accounting periods.
Bad debts.
Depreciation.
Donations up to 2% of net profit.
Contributions to reserve funds.
Entertainment expenses — up to 0.3% of gross revenue, but not exceeding 10 million baht.
Donations to public educational institutions or for the support of public parks, playgrounds, and/or sports facilities.
Amortization (depending on the type of assets).

Tax Filing

The annual tax return must be filed within 150 days after the end of the accounting period. The tax must be paid on the day of filing.
An interim tax return must be filed within two months after the end of the first six months of the accounting period.