Thailand: Guide to Income Tax for Foreign Company 

In Thailand, businesses are subject to different types of taxes depending on their legal structure and the nature of their operations. Foreign companies, in particular, may be subject to different tax rules than Thai companies.  

Thai companies are generally taxed at a rate of 20% on their net profit, but certain types of businesses may be eligible for reduced tax rates. These include small businesses, companies listed on the Stock Exchange of Thailand and companies registered in the Market for Alternative Investment. 

Foreign companies carrying on business in Thailand are generally taxed at a rate of 30% on their profits derived from Thailand. However, international transportation companies are taxed at a rate of 3% on their gross receipts. 

Foreign companies that do not carry on business in Thailand but derive income from Thailand may be subject to withholding tax on certain categories of income, such as remittance of profits, dividends and other income like interests and royalties. The withholding tax rates may be reduced or exempted under the provisions of double taxation agreements between Thailand and other countries. 

Both Thai and foreign companies carrying on business in Thailand must register for tax purposes with the Revenue Department and submit tax returns and payments on a semi-annual or annual basis, depending on the type of business. 

Thailand has entered into tax treaty agreements with 57 countries to avoid double taxation and encourage international trade and investment. 

Businesses in Thailand may be subject to other taxes, such as value-added tax (VAT) and specific business taxes. It is important for businesses to understand their tax obligations and to seek advice from a tax professional if needed. 

Tax benefits

Companies that register under Thai law may be eligible for various tax benefits, including: 

  • Income tax holidays of 3 to 8 years for businesses with Investment Promotion Privileges. 
  • Reduced or exempt import duties on raw materials and imported machinery for businesses with Investment Promotion Privileges or industries operating in Export Processing Zones and Free Trade Zones. 
  • Double deductions for the costs of transportation, electricity, and water supply for industries with Investment Promotion Privileges. 
  • 200% deductions for the costs of hiring qualified researchers for research and development projects. 
  • 150% deductions for employee training costs to improve human capital. 
  • Small and medium-sized companies may be able to claim special initial allowances for the acquisition of computers (40%), plants (25%) and machinery (40%). 

Thailand also offers tax incentives for special economic zones. Projects in the Eastern Economic Corridor (EEC), for example, can receive exemptions or reductions of up to 50% on corporate income tax (CIT). Additionally, employees with special skills and knowledge who work in the EEC are eligible for personal income tax reductions. 

If you have any questions about corporate tax in Thailand or need assistance with setting up a business in the country, please feel free to contact us. Our team of experts will be happy to help you navigate the regulatory landscape and achieve your business goals in Thailand. 

Healy Consultants Group provides a wide range of corporate services across the world. Email or WhatsApp us now to find out more about our services.

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