The year is coming to an end, which means it is time to prepare for corporate income tax filing. More precisely, the reporting deadline will come later — by the end of May next year — but it is advisable to start calculating income and expenses now.
The tax rate this year remains unchanged: 20%
For small and medium-sized enterprises, a progressive tax rate applies:
| Profit (baht) | Tax rate |
|---|---|
| 0 – 300,000 | 0% |
| 300,001 – 1,000,000 | 15% |
| Over 1,000,000 | 20% |
An SME is considered a company with registered capital of less than 5 million baht and annual revenue not exceeding 30 million baht.
Expenses
A general list of deductible expenses can be found here.
In 2020, due to the coronavirus situation, the taxable base can be reduced through additional deductions. In particular, a tax deduction for salary expenses paid between 1 April and 31 July 2020 amounts to 300% of the expense, provided the following conditions are met:
- For the previous 12-month accounting period ending on or before 30 September 2019, total revenue did not exceed 500 million baht and the company employed no more than 200 employees.
- The number of employees at the end of April, May, June, and July 2020 must not be lower than the number of employees at the end of March 2020.
- The deduction applies only to salaries not exceeding 15,000 baht per month.
More information on other deductible benefits can be found in the previous article.
Important points to remember:
— Once a company reaches 1.8 million baht in annual turnover, it is required to register for VAT.
The question of which amounts are included in turnover and which are not should be discussed with the company’s auditor.
— Reducing the taxable base through expenses such as goods, services, rent, and salaries is only possible before the end of the fiscal year. Payments made after year-end cannot be retroactively included as expenses.
— The above applies also to companies whose fiscal year differs from the calendar year. The deadline for submitting financial statements is 150 days after the end of the fiscal year.
For any questions regarding taxation in Thailand, please call +6687-348-57-03.
Author: Alexandra Agapitova.
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