by Vincent / 1 April 2017 / Published in B-Accounting, Blog
Post Image

With effect from 1st January 2016, The Revenue Department in Thailand has introduced new legislation that aims, through substantial incentives, at encouraging SME’s to file accurate tax reports in order to help create a tax base that delivers a true reflection of the country’s economic status.

SME’s that sign up to the scheme will enjoy a number key benefits:

An exemption from all Corporate Income Tax on net profit for the 2016 Accounting year.

Tax exemptions on the first THB 300,000 and a lower 10% rate for profits above that amount, for the 2017 Accounting period.

An amnesty from the scrutiny of backdated, possibly negligent, tax submissions. This, it is hoped, will remove the widespread practice of companies carrying two ledgers, one “official”, the other for internal purposes.

Note, though; this immunity will not be granted to companies that are already under investigation or involved in court proceedings. Also, if a refund is requested during a ‘tax-exempt’ year, the Revenue Department can still audit this specific period.

SME’s are eligible to sign up for the scheme until 15th March 2016, and, at B-Accounting, we have the knowledge and experience to help you do so, quickly and efficiently. There are, though, a number of conditions that must first be fulfilled:

For the purposes of qualification for tax exemption / reduction, an SME must have a maximum of THB 5 million in registered and paid-up capital, and an annual turnover of less than THB 30 million for all years up until the end of 2015.

To qualify for exemption from backdated investigations, the business must show a revenue under THB 500 million for the year ending 31st december 2015

To further regulate SME accounting procedures, the bank of Thailand and Finance Ministry will introduce, on 1st january 2019, new stipulations for Thai banks; from that date, when an SME requests a bank loan, it will be necessary for every bank to ensure all SME Accounts, Financial Statements and tax submissions are up to date and a true record.

It is also likely that, in the near future, the Revenue Department will insist that all taxes are paid electronically with a direct link between banks and the tax authorities, thus providing greater transparency and accountability.

It is, thus, clearly apparent that the government is committed to eradicating lax and improper accounting procedures and these new incentives are designed to provide SMEs with the opportunity to tidy up their books, to review and, if necessary, renew their procedures. We strongly recommend that any company that falls within the guidelines to take advantage of the tax breaks and, if relevant, the “amnesty”. We are here to help, feel free to get in touch

Need some help?

Bangkok Accounting Company, we are here to assist you. Feel free to give us a call if needed.

Tagged under: ,