Corporate income tax in Thailand
Rates, deductible expenses, filing deadlines and penalties, explained for company owners and finance managers.
Corporate income tax (CIT) in Thailand is a direct tax on the net profit of juristic persons that carry on business in Thailand or earn income from Thailand. The standard rate is 20%, and small companies pay less on their first THB 3 million of profit.
CIT applies to companies and partnerships incorporated under Thai law, and to foreign companies that do business in Thailand or receive income from Thailand that the Revenue Code taxes. The Revenue Department (RD) collects it through two returns a year: PND 51 at the half year and PND 50 after the year end.
Tax deductibility of expenses
Taxable profit is the revenue of the accounting period (business income, dividends, interest, royalties and so on) minus the expenses incurred wholly for the business in the same period.
The Revenue Code limits what can be deducted. The main rules:
Deductible expenses
- Expenses incurred in the ordinary course of business
- Depreciation, up to the maximum rates set by the Revenue Code
- Entertainment expenses, up to 0.3% of revenue or paid-up capital (whichever is higher), capped at THB 10 million
- Donations to approved charities, up to 2% of net profit
- Qualifying staff training costs, deductible at 200%
- Qualifying research and development costs, deductible at 200%
- Tax losses carried forward from the previous five accounting periods
Non-deductible expenses
- Personal expenses
- Gifts to third parties
- Tax penalties, surcharges and fines
- Expenses without supporting documents
- Losses that can be recovered from an insurer
- Expenses that belong to a prior accounting period
- Withholding tax the company pays on behalf of its suppliers
How to calculate CIT
CIT is charged on net profit, meaning total revenue minus allowable expenses, at the rates below:
| Taxpayer | Tax base | Rate (%) |
|---|---|---|
| Small company * |
|
|
| Other companies |
|
|
* A small company has paid-up capital of THB 5 million or less at the end of the accounting period and revenue of THB 30 million or less.
How to file CIT
Companies file two CIT returns a year. The half-year return (PND 51) is due within 2 months after the first six months of the accounting period (by 31 August for a 31 December year end) and prepays tax on an estimate of the full year’s profit. The annual return (PND 50) is due within 150 days of the year end (the end of May for a 31 December year end), together with the audited financial statements.
Penalties to know
- If the half-year estimate of profit falls more than 25% short of the actual profit, the RD can add a surcharge of 20% of the tax shortfall, unless there was a reasonable cause.
- If the annual return or payment is late, a surcharge of 1.5% per month of the tax due applies.
