business, personal

Understanding the Thai Taxation System – A Simple Overview

I thought it might be helpful to some people reading to write a short piece on Thai Taxation system. From recent discussions with our clients in the run up to the deadline date for submission of Personal Income Tax (PND91), I found that there is general confusion for foreigners running businesses here as to what tax is for which purpose.

The following overviews of taxes encountered in the day to day running of business, which might prove helpful:

Monthly Taxes:

PND1 – Por Ngor Dor 1

Personal Income Tax return, is payable on income and salary earned within Thailand. PND1 monthly payments are payable to your local Revenue Department office on the 7th of the following month.

Late payment incurs, a once off fine of 200 baht per item and a monthly interest rate of 1.5% on the amount due.

PND53 – Por Ngor Dor 53

Income tax withheld at source for income paid to companies. The tax rate various from 1% to 15 % in the case of payment made to local Thai companies and 10 to 15% in the case of payments to overseas companies. Payment of PND53 is due on the 7th of the following month.

Like PND1, late payments incur a fine of 200 baht per item and a monthly interest rate of 1.5% on the amount due.

PP30 – Por Por 30

Value Added Tax return (VAT) is payable by any person or entity who regularly supplies goods or provides services in Thailand and has an annual turnover exceeding 1.8 million baht is subject to VAT in Thailand. The VAT rate in Thailand is 7%. Payment for PP30 is due on the 15th of the following month.

A late payment fine of 500 baht per item applies in addition to a monthly interest rate of 1.5% on the mount due, plus to up a maximum rate of 20% of the amount due if payments have not been made after 60 days.

SSO – Social Security Office  – Pra-gan-saung-chom

Social Security Office payments are payable by all employees of a company a rate of 5% of their monthly income, up to a ceiling of 750 baht per month. The company pays an additional 5% contribution to the Social Security Office in there district. Employees who are also directors of a company do not pay social security as they are not entitled to these benefits.

There is no fine for late payments of SSO but a flat rate of 2% per month applies on the monies due.

Annual Taxes:

PND91 –  Por Ngor Dor 91

Personal Income Tax is a direct tax levied on income of a person. A person means an individual, an ordinary partnership, a non-juristic body of person and an undivided estate. Tax rates vary by the income you receive in the year and range from 10% to 37%. Your personal income tax return is due yearly on the 31st March for the previous year (January to December). For those renewing Non Immigrant Visa it is essential that this tax is paid on time and the payment receipt is certified as this is needed when applying for your visa extension.

A late payment fine of 200 baht per item applies in addition to a monthly interest rate of 1.5% on the mount due.

PND50  – Por Ngor Dor 50

Corporate income tax is levied on both Thai and foreign companies. A Thai company means a company incorporated under the law of Thailand. Thai company is subject to tax in Thailand on its worldwide net profit at the end of each accounting period (12 months). Corporate Income tax, year end is payable on the 30th May for the previous year. This tax will be calculated when the annual financial statements / yearly audited accounts are complied by the company’s auditors.

PND51  – Por Ngor Dor 51

Corporate income tax. Mid Year return must be submitted by the 31st August each year.

The late payment fine for both PND50 and 51 is 2,000 baht per item and an additional monthly interest rate of 1.5% on the mount due will apply.

More details of Thai Taxes in English can be found on the Revenue Departments website at: http://www.rd.go.th/publish/6045.0.html