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ThailandTax Profile

Produced in conjunction with the KPMG Asia Pacific Tax Centre

Updated: Novemer !"#$


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Contents

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Corporate )ncome Tax

)nternational Treaties for the Avoidance of *oule Taxation

)ndirect Tax

Personal Taxation

+ther Taxes

,ree Trade A-reements

Tax Authorit.

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0 !"#$ KPMG )nternational Cooperative 12KPMG )nternational345 a 6wiss entit.7 Memer firms of the KPMG networ8 of independent firms are affiliated with KPMG

)nternational7 KPMG )nternational provides no client services7 No memer firm has an. authorit. to oli-ate or ind KPMG )nternational or an. other memer firm vis99vis third

parties5 nor does KPMG )nternational have an. such authorit. to oli-ate or ind an. memer firm7 All ri-hts reserved #


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Tax ;ate



!$ percent < ,or accountin- periods e-innin- # =anuar. !"#! to $# *ecemer !"#!

!" percent < ,or two accountin- periods e-innin- on or after # =anuar. !"#$


;esidence All companies5 includin- other forms of le-al entities5 that are re-istered under Thai law5 or that are incorporated underforei-n law and carr. on usiness in Thailand5 are suject to corporate income tax7

All income of companies re-istered under Thai law is suject to corporate income tax7 Companies re-istered underforei-n law and carr.in- on usiness in Thailand are taxed on their net profits arisin- from their usiness activities inThailand7

Compliance re>uirements Thailand operates a self9assessment s.stem for filin- income tax returns5 with si-nificant penalties for non9compliance7

Corporate income tax is pa.ale in two instalments each .ear7 ?alf9.ear corporate income tax returns must e filed .the end of the ei-hth month of the accountin- .ear7 Annual corporate income tax returns must e filed within #&" da.s ofthe end of accountin- .ear7

)nternational @ithholdin- Tax;ates

*ividends paid to non9residents will e suject to withholdin- tax at #" percent7

;o.alties paid to non9residents will e suject to withholdin- tax at #& percent if paid to a compan. not carr.in- on ausiness in Thailand7 ?owever5 this rate ma. e reduced . an applicale tax treat.7

)nterest paid to non9residents is suject to withholdin- tax at #& percent7 This rate ma. e reduced to #" percent if theinterest pa.ment is made to a financial institution and a tax treat. is applied7

Non9residents are liale to #& percent tax on capital -ains realied on the disposal of Thai shares if ac>uired . a Thairesident7 This tax ma. e reduced or eliminated . an applicale tax treat.7



parties5 nor does KPMG )nternational have an. such authorit. to oli-ate or ind an. memer firm7 All ri-hts reserved #


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?oldin- rules Generall.5 dividends are full. taxale7

*ividends received from a Thai susidiar. . a Thai compan. which is not listed on the 6ecurit. Bxchan-e of Thailand16BT4 are suject to a &" percent exemption7 The exemption is increased to #"" percent if the recipient of the dividend isa Thai compan. which is listed on the 6BT or owns at least !& percent of the issued shares of the Thai susidiar. withno cross9shareholdin- 1i7e7 the compan. pa.in- the dividend must not hold shares in the recipient compan.47 A Thaicompan. shall e eli-ile for these &" percent and #"" percent tax exemptions onl. if it holds shares in the Thaisusidiar. that pa.s the dividend for three months prior to the dividend ein- paid and for three months after7

*ividends received from non9Thai susidiaries are full. exempt if at least !& percent of the votin- ri-hts in the susidiar.have een held for six months prior to the dividend ein- paid5 and the dividend is paid from a net profit which has eensuject to income tax or profit tax at the rate of #& percent or more7

Thailand does not impose a separate tax on corporate capital -ains7 An. -ains arisin- from the disposition of assets5re-ardless of the purpose for which the assets were ac>uired5 are treated as ordinar. income suject to corporateincome tax7

Tax Dosses Current period offset < there is no limitation to the amount of losses ale to e offset7 Tax losses ma. e carried forwardfor five .ears7

No carr.9ac8 of tax losses is permitted in Thailand7

Tax Consolidation E Grouprelief

Transfer of shares

Transfer of assets

There is no tax consolidation re-ime in Thailand5 nor is there provision for corporate -roup relief of losses7

The transfer of shares is suject to stamp dut. of "7# percent7

6tamp dut. of "7& percent applies on the transfer of land and uildin-s7 ?owever5 the transfer ma. e suject to 6pecialFusiness Tax at $7$ percent and a land transfer -overnment fee of ! percent7 @here a transfer is suject to 6pecialFusiness Tax5 no stamp dut. applies7

+ther transfers of tan-ile assets and intan-ile assets are suject to normal tax implications 1i7e7 AT at seven percentand corporate income tax on the -ain of the transfer of the assets47

C,C rules There is no C,C re-ime in Thailand7



parties5 nor does KPMG )nternational have an. such authorit. to oli-ate or ind an. memer firm7 All ri-hts reserved !


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Transfer Pricin- ThailandHs transfer pricin- re-ime is consistent with the +BC* model 1i7e7 armHs len-th asis47

Thai usinesses are re>uired to ensure that the pricin- of transactions with related parties is ased on one of theaccepted methodolo-ies and that the process of estalishin- transfer prices is appropriatel. documented7

The Thai ;evenue *epartment accepts oth APAs and MAPs7

Thin Capitalisation

General Anti9avoidance

Anti9treat. shoppin-

+ther specific anti9avoidancerules

;ulin-s

)ntellectual Propert.)ncentives

;I* )ncentives

Thailand has no thin capitalisation re-ime7 ?owever5 if a tax incentive has een -ranted . the Foard of )nvestment 1F+)45the thin capitalisation ratio cannot exceed $:#7

Thailand does not have -eneral anti9avoidance provisions7

Thailand does not have specific provisions related to anti9treat. shoppin-7

Thailand does not have an. other specific anti9avoidance provisions7

;ulin-s ma. e re>uested from the Thai tax authorit.7 Most of the rulin-s are pulished on the ;evenue *epartmentHs

wesite7

Thailand has no specific intellectual propert. 1)P4 incentives5 ut )P is tied to ;I* incentives 1see elow47

There are tax exemptions on license fees5 and a doule deduction for >ualified ;I* expenses7



parties5 nor does KPMG )nternational have an. such authorit. to oli-ate or ind an. memer firm7 All ri-hts reserved $


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+ther incentives Tax9related relief and other incentives are -ranted to Thai and forei-n companies investin- in F+) promoted projects7?owever5 the F+) does not -rant promotional incentives to a ranch office of a forei-n compan.7 Activities eli-ile forpromotion are specified in -uidelines issued . the F+)7 Activities not specificall. listed in the F+) -uidelines ma.nevertheless still e eli-ile for promotion if considered to e of enefit to the Thai econom. and are in accordance withnational development ojectives7

Bxamples of F+) tax incentives include:

)mport dut. exemptions

Bnhanced deductions

Tax holida.s

Tax9exempt dividends

Tax rate reductions

)n addition5 Thailand offers a re-ional operatin- head>uarters tax incentive5 provided certain conditions are met7 Theseincentives include a reduced corporate tax rate5 reduced tax rate on interest and ro.alties and an exemption on dividends7

?.rid )nstruments

?.rid entities

6pecial tax re-imes forspecific industries or sectors

There are no specific rules applicale to h.rid instruments5 and -enerall.5 the tax treatment follows the contractualarran-ement and accountin- treatment7

There are no specific rules applicale to h.rid entities5 and -enerall.5 the tax treatment follows the le-al classificationunder the Thai ;evenue Code and the accountin- treatment7

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Petroleum industr. 1oil and -as explorationEexploitation companies4: a &" percent petroleum income tax is imposedon profits earned from petroleum sales7

6MB 1compan. with no more than T?F &million of paid up capital and turnover from sales or services of not morethan T?F $"million4: pro-ressive C)T rate startin- with a ero percent tax rac8et scalin- up to a hi-hest rac8et of !"percent7

,orei-n juristic corporations carr.in- on the usiness of international transportation: $ percent tax on their -rossincomes efore deduction of expenses7

Fan8in- companies are -enerall. suject to $7$ percent 6pecific Fusiness Tax in lieu of ( percent AT7

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parties5 nor does KPMG )nternational have an. such authorit. to oli-ate or ind an. memer firm7 All ri-hts reserved %


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)n ,orce

)nternational Treaties for the Avoidance of *oule Taxation

Armenia

Australia

Austria

Fahrain

Fan-ladesh

Fel-ium

Ful-aria

Canada

Chile

China

C.prus

Cech ;epulic

*enmar8

,inland

,rance

German.

?on- Kon-

?un-ar.

)ndia

)ndonesia

)srael

)tal.

=apan

Korea 1;epulic of4

Kuwait

Daos

Duxemour-

Mala.sia

Mauritius

M.anmar

Nepal

Netherlands

New ealand

Norwa.

+man

Pa8istan

Philippines

Poland

;omania

;ussia

6e.chelles

6in-apore

6lovenia

6outh Africa

6pain

6ri Dan8a

6weden

6witerland

Taiwan

Tur8e.

U8raine

United Ara Bmirates

United Kin-dom

Unites 6tates

Ue8istan

ietnam

Ne-otiated5 not .et in force attime of pulication

Treaties with Felarus5 B-.pt5 Bstonia5 )reland5 Ken.a5 and Mon-olia have een ne-otiated ut are not in force at the timeof writin-7



parties5 nor does KPMG )nternational have an. such authorit. to oli-ate or ind an. memer firm7 All ri-hts reserved &


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$ )ndirect Tax

alue Added Tax 1AT4

The AT rate at the time of writin- is a reduced rate of ( percent 1standard rate is #" percent47Certain -oods and services are ero9rated or exempt from AT7

)ndirect Tax

6tandard ;ate

,urther information ,or more detailed indirect tax information on various countries5 refer to:

KPMGLs ATEG6T Bssentials



parties5 nor does KPMG )nternational have an. such authorit. to oli-ate or ind an. memer firm7 All ri-hts reserved '


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% Personal Taxation

Personal income tax

Net taxale income is taxed at pro-ressive rates up to $( percent7 The maximum current tax rate applies to incomeexceedin- T?F %million in the case of oth residents and non9residents7

;esident and non9resident emplo.ees are re>uired to ma8e contriutions to ThailandHs social securit. fund7 Contriutionsto the social securit. fund are made . emplo.ers and emplo.ees in e>ual proportions7 The current rate of contriution. each part. is a reduced rate of % percent of the emplo.eeHs income5 up to a maximum amount of T?F '"" per month1standard rate is & percent5 up to maximum amount of T?F (&"4

There is a treat. etween the Netherlands and Thailand on the transfer of social securit. enefits7

,or more detailed personal taxation information5 refer to:

KPMGHs Thin8in- Fe.ond Forders

)ncome Tax

Top ;ate

6ocial 6ecurit.

)nternational 6ocial 6ecurit.A-reements

,urther information



parties5 nor does KPMG )nternational have an. such authorit. to oli-ate or ind an. memer firm7 All ri-hts reserved (


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& +ther Taxes

Certain Thai usinesses are excluded from the AT s.stem and are5 instead5 suject to 6FT7 6FT is calculated as apercenta-e of -ross receipts and the rate varies etween !7(& percent and $7$ percent7 6FT applies to the followin-usinesses:

Fan8in- and similar

,inance5 securit. and credit

,actorin-

Dife insurance

Pawnshop ro8era-e

6ale of securities in stoc8 mar8et 1althou-h these are currentl. exempt from 6FT4

Tradin- in immovale propert.

6pecific usiness tax 16FT4

Customs dut. Customs dut. is levied on oth imports and some cate-ories of exports7 )mport duties are levied on a specific5 advalorem or compound asis7 The compound asis is a comination of the specific and ad valorem asis 1whichever ishi-her47 The dut. rates -enerall. ran-e etween one percent and !" percent5 except for some luxur. products 1e7-7ci-arettes5 li>uor and vehicles4 which ma. e as hi-h as '" percent7

Bxport duties are -enerall. imposed on onl. two -roups of commodities5 comprisin- rawhide and wood7

Bxcise dut. Bxcise dut. is imposed on commodities ased on a specific5 ad valorem or compound asis7 The compound asis is acomination of the specific and ad valorem asis 1whichever is hi-her47 The excise tax is applied to a ran-e of productswhether manufactured locall. or imported7 The tax liailit. arises on locall. manufactured -oods when the products areshipped from the factor.7 +n imported -oods5 excise tax is imposed on importation7

)n addition to excise dut.5 interior tax at the rate of #" percent is imposed on the excise dut. amount for all the aoveproducts5 except toacco and cards7

6tamp dut. A numer of documents and transactions are suject to stamp dut.7 ;ates depend upon the class of instrument5 ut in-eneral are etween "7# percent and # percent5 althou-h for certain instruments the stamp dut. is capped 1e7-7 for loandocuments stamp dut. is capped at T?F #"5"""47



parties5 nor does KPMG )nternational have an. such authorit. to oli-ate or ind an. memer firm7 All ri-hts reserved /


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Propert. taxes

)nheritance tax

Gift tax

A house and land tax is levied at the rate of #!7& percent of the assessed rental value of the propert.7 )t is levied on theowner of the uildin-5 ut does not appl. to owner9occupied residences7

There is no inheritance tax in Thailand7

There is no -ift tax in Thailand7



parties5 nor does KPMG )nternational have an. such authorit. to oli-ate or ind an. memer firm7 All ri-hts reserved


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'

)n force

,ree Trade A-reements

Australia

)ndia

A6BAN 9

Frunei *arussalam

Camodia

)ndonesia

A6BAN < China

A6BAN < )ndia

A6BAN < =apan

A6BAN < 6outh Korea

A6BAN < Australia < New ealand

Dao

Mala.sia

M.anmar

Philippines

6in-apore

Thailand

ietnam

=apan

New ealand

Peru

)n ne-otiation Chile

Buropean Union

A6BAN < =apan < 67 Korea < China5

A6BAN < =apan < 67 Korea < China < Australia < New ealand < )ndia7

Thailand < F)M6TBC 1Fan-ladesh5 Fhutan5 )ndia5 M.anmar5 Nepal5 6ri Dan8a5 Thailand4

Thailand < B,TA 1)celand5 Diechtenstein5 Norwa.5 and 6witerland4

6ource: ,TA *epartment of Trade Ne-otiations5 Thailand



#"parties5 nor does KPMG )nternational have an. such authorit. to oli-ate or ind an. memer firm7 All ri-hts reserved


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( Tax Authorit.

The ;evenue *epartment

Din8 to The ;evenue *epartment

The tax authorit. predominantl. adopts a ris8 ased approach to the selection of returns for audit7 A tax audit will eperformed for ever. tax refund re>uested7 )n the past few .ears5 the tax authorit. has e-un to implement a routine taxreview5 where an audit ma. e performed re-ularl.5 etween one to three .ears5 dependin- on the taxpa.erHs sie oroperatin- results7

A t.pical tax audit commences with a letter re>uestin- the provision of supplementar. anal.sis or information7 Taxpa.ersare advised to contact their tax advisor immediatel. when a tax audit commences or an. correspondence is receivedfrom the tax authorit.7

The t.pical len-th of an audit period varies on a case . case asis5 and the more complex cases ma. ta8e a sustantiallen-th of time efore a resolution is reached7

Generall.5 the tax authorit. focuses on income tax in tax audits however this can e expanded to cover other taxesincludin- AT and withholdin- tax7 A transfer pricin- audit ma. e conducted separatel. . the transfer pricin- team inthe tax authorit.7

Tax Authorit.

Tax audit activit.

Appeals )f the ori-inal assessment is conducted . the *istrict ;evenue +ffices5 the taxpa.er must appeal the assessment within#& da.s from the date of receipt of the assessment notification7

)f the ori-inal assessment is conducted . other ;evenue +ffices5 the taxpa.er must appeal the assessment within $"da.s from the date of receipt of the assessment notification7

)t should e noted that an appeal does not defer pa.ment of taxes and duties7



##parties5 nor does KPMG )nternational have an. such authorit. to oli-ate or ind an. memer firm7 All ri-hts reserved

Contact us

Fenjamas Kulla8attimasPartner in Char-eKPMG in ThailandT '' ! '((!%!'B enjamasO8pm-7co7th

www78pm-7comEtax

This profile was provided . professionals from KPMGHs memer firm in Thailand7

The information contained herein is of a -eneral nature and is not intended to address the circumstances of an. particular individual or entit.7 Althou-h we

endeavour to provide accurate and timel. information5 there can e no -uarantee that such information is accurate as of the date it is received or that it willcontinue to e accurate in the future7 No one should act on such information without appropriate professional advice after a thorou-h examination of the particular

situation7

0 !"#$ KPMG )nternational Cooperative 12KPMG )nternational345 a 6wiss entit.7 Memer firms of the KPMG networ8 of independent firms are affiliated with

KPMG )nternational7 KPMG )nternational provides no client services7 No memer firm has an. authorit. to oli-ate or ind KPMG )nternational or an. other memerfirm vis99vis third parties5 nor does KPMG )nternational have an. such authorit. t o oli-ate or ind an. memer firm7 All ri-hts reserved7

The KPMG name5 lo-o and 2cuttin- throu-h complexit.3 are re-istered trademar8s or trademar8s of KPMG )nternational7

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