Corporate Income Tax: Two Months Remaining

What should be done?
For companies whose financial year ends on December 31, now is the optimal time to:

assess potential profit
work on tax optimization (strictly within legal frameworks)

Below is a short checklist of what should be completed in the next two months.

1. Collect all Withholding Tax certificates

Gather Withholding Tax (WHT) certificates from companies that paid for your services during the year. This will help determine what portion of corporate income tax has already been paid on behalf of your company.

2. Review taxes withheld by your company

If you paid contractors, make sure all required taxes were properly withheld and remitted to the tax authorities.

3. Settle with counterparties

Example: if you received a commission in 2024, but the sub-agent’s invoice is dated 2025, you may still deduct the sub-commission from the taxable base — provided you have supporting documents confirming the obligation.

It is advisable to discuss such cases with your auditor in advance.

4. Pay employee bonuses

If bonuses are paid at year-end and are linked to company profit, they may not be recognized as deductible expenses.

To qualify as expenses, bonuses must:

be предусмотрены внутренними правилами
not be tied to annual profit

5. Adjust bonus structure

With a comprehensive tax planning approach for both the company and employees, bonuses can serve not only as a motivation tool but also as a tax optimization instrument.

Example (based on the table)

A company (SME) with 10 employees and annual revenue of 10 million THB, where expenses consist only of salaries:

Option 1 — lower salaries (35,000 THB per employee):

Annual payroll: 4,200,000 THB
Total PIT: 55,000 THB
Corporate tax (CIT): 965,000 THB
Total tax burden: 1,020,000 THB

Option 2 — higher salaries (60,000 THB per employee):

Annual payroll: 7,200,000 THB
Total PIT: 365,000 THB
Corporate tax (CIT): 375,000 THB
Total tax burden: 740,000 THB

Option 3 — mixed structure (Thai staff + foreign employees):

8 Thai employees: 15,000 THB
2 foreign employees: 240,000 THB each
Annual payroll: 7,200,000 THB
Total PIT: 1,162,000 THB
Corporate tax (CIT): 375,000 THB
Total tax burden: 1,537,000 THB

Conclusion

The structure of salaries directly impacts the overall tax burden.

A well-planned approach allows you to legally redistribute the tax load between corporate income tax (CIT) and personal income tax (PIT) and achieve a more efficient result.