Tax Declarations in Thailand: An overview for Businesses and Individuals

Monthly Tax Declaration in Thailand

Social Security Contribution

Employers in Thailand are required to register their employees with the Social Security Office and contribute a portion of their salaries to the system. Both the employer and the employee must contribute five percent of the employee’s salary, with a cap set at 1,500 THB per month for each party. These contributions are used to fund health insurance, maternity leave, unemployment benefits, and pension funds. Employers must ensure that social security contributions are submitted by the 15th of the following month. A delay in submission incurs a fine of two percent per month on the total contributions.

Personal Income tax Declaration in Thailand 

Companies that employ staff must deduct and submit monthly personal income tax, known as withholding tax, to the Revenue Department. The most common tax forms include:

• PND 1, which applies to salaries and wages,
• PND 3, which covers payments made to individual service providers such as freelancers and consultants,
• PND 53, which is used for payments made to registered Thai companies.
• PND 54 applies to payments made to foreign service providers, with a tax rate of fifteen percent unless a Double Taxation Agreement (DTA) provides a reduction or exemption.

These tax submissions must be filed prior to the seventh of the subsequent month. Should a firm fail to hand in the necessary forms on time, it could face fines ranging from 2,000 to 5,000 Thai baht, with an additional monthly interest penalty of 1.5 percent on unpaid taxes.

Valued-Added Tax Filings

Businesses that generate annual revenues exceeding 1.8 million THB are required to register for VAT. Value-added tax is levied at a standard rate of seven percent in Thailand, applying to most goods and services. Certain transactions qualify for a zero-rated VAT though, like the export of goods and services, some agricultural products, and raw materials sourced locally. Educational institutions, healthcare providers, and financial organizations are exempt from needing to register for VAT.
The VAT filing process involves submitting form PP 30, the monthly VAT return, or form PP 36 for self-assessed VAT relating to services received from abroad. The deadline to submit PP 30 is the 15th of the next month, while PP 36 must be turned in by the seventh. Failing to comply with Value Added Tax Declaration in Thailand may lead to substantial penalties and possible business constraints.

Corporate Income tax Prepayment 

Companies operating in Thailand are expected to estimate their half-year profit and pay 50 percent of their predicted annual corporate tax in advance through PND 51. This tax prepayment must be handed in by August 31 every year. If the final annual tax return filed through PND 50 shows the company’s actual tax liability is 25 percent higher than its mid-year estimate, a 20 percent penalty applies.

Annual Tax Declaration in Thailand 

Audited Financial Statements Submission 

All registered companies operating within Thailand, including both Thai Limited Companies as well as foreign subsidiaries and branches, are mandated to prepare and submit audited annual financial statements to both the Department of Business Development under the Ministry of Commerce plus the Revenue Department. Required financial documents encompass a balance sheet, an income statement, a cash flow statement, notes accompanying the financial statements, and an auditor’s report.
These financial statements necessitate compilation by the company’s accountant and auditing by a licensed Thai auditor. Companies utilizing a calendar fiscal year must provide their examined financial statements to the DBD within five months of the end of the fiscal year, with the ultimate deadline falling on May 31st. The corresponding corporate tax return, PND 50, likewise necessitates submission to the Revenue Department by this identical date. Late submissions to the DBD may incur fines up to 50,000 THB, while late tax filings with the Revenue Department can lead to a fine and a 1.5 percent monthly interest charge on unpaid tax amounts.

Annual Corporate Income Tax Declaration in Thailand 

Annually, every Thai-registered company must file a corporate income tax return using PND 50 regardless of whether there was activity or profit. This tax declaration in Thailand needs to include details on the company’s complete revenue, expenses, and net taxable income for the fiscal year. The deadline for submission is May 31st, or one hundred and fifty days after the end of the fiscal year. Companies failing to meet this deadline risk fines ranging from 2,000 to 5,000 THB, alongside a 1.5 percent monthly interest penalty on unpaid tax liabilities.

Withholding Tax Declarations (PND 1, PND 3, PND 53, PND 54, PND 1A) 

Thailand levies various withholding taxes on payments to employees, freelancers, contractors and foreign service providers through mandatory deduction schemes. Designated forms must be filed by specified deadlines each month:

• PND 1: Employers must deduct withholding tax from employee salaries and remit it to the authorities monthly. The applicable tax rate follows a progressive scale from 0% to 35%, and the deadline for filing is the 7th of the following month.
• PND 1A: This form serves as an annual summary of payroll withholding tax and must be submitted by employers by February 28 each year.
• PND 3: Businesses making payments to freelancers or consultants must withhold between 3% and 5% of the payment amount and file the form monthly by the 7th of the following month.
• PND 53: When companies pay Thai-registered firms for services, they must withhold 3% to 5% and submit the declaration by the 7th of the following month.
• PND 54: This form applies to payments made to foreign service providers. The standard withholding tax rate is 15%, unless a Double Taxation Agreement (DTA) applies, which may reduce or exempt the withholding tax. The filing deadline remains the 7th of the following month.

Value Added tax Declaration in Thailand: Compliance and Complex Deadlines

Value-added taxation (VAT) is an essential part of Thailand’s fiscal system, necessitating businesses to submit changing monthly tax declarations dependent on their taxable deals. Firms subject to VAT must submit their returns utilizing PP 30 and PP 36 forms, each relevant to specific situations.

What are the Key Value Added tax declarations in Thailand? 

• PP 30 (Monthly VAT Return): This form is utilized for the standard VAT statement, which enterprises must submit every month. The VAT rate in Thailand is 7%, and the submission deadline is the 15th of the following month. However, some months might require earlier or later submission depending on holidays or other events.
• PP 36 (Self-Assessed VAT for Services Received from Abroad): When a Thai company gains services from an overseas provider, it must independently assess and remit VAT at 7%. The filing deadline for PP 36 is typically the 7th of the following month, though like the PP 30 this deadline can be moved earlier or later when needed.