Corporate income tax in Thailand is calculated based on the net profit earned by corporations during the accounting period. The calculation involves the following steps:
- Determination of Gross Income: Corporations calculate their gross income by aggregating all sources of revenue, including sales revenue, service income, interest income, rental income, and other operating income.
- Allowable Deductions: Corporations are allowed to deduct various expenses incurred in the generation of income, including costs of goods sold, operating expenses, administrative expenses, depreciation, and amortization.
- Adjustments: Certain adjustments may be made to the net profit to arrive at the taxable income, such as adding back non-deductible expenses or deducting additional allowances.
- Application of Tax Rates: The taxable income is then subject to the applicable corporate income tax rates to determine the tax liability.
General Corporate Income Tax Rate: 20%.
For companies with paid-in capital not exceeding 5 million baht and income from sales and/or services not exceeding 30 million baht:
| Net Profit (THB) | Tax Rate (%) |
|---|---|
| Up to 300,000 | 0 |
| 300,001 to 3,000,000 | 15 |
| Over 3,000,000 | 20 |
Corporations may also be eligible for tax incentives, deductions, or exemptions based on their industry, size, location, or investment activities.
Taxable income for corporations in Thailand includes all sources of revenue earned during the accounting period, including:
- Sales revenue
- Service income
- Interest income
- Rental income
- Capital gains
- Other operating income
Certain deductions and allowances are allowed to arrive at the taxable income, including expenses incurred in the generation of income, depreciation, and amortization.
Certain types of income are exempt from corporate income tax in Thailand, including:
- Dividends received from subsidiaries or affiliated companies
- Interest income from government bonds
- Capital gains from the sale of listed securities
- Income from certain types of financial instruments
These exemptions are provided to encourage investment, stimulate economic growth, and attract foreign investment into Thailand.
The corporate income tax system in Thailand is governed by the Thai Revenue Code (B.E. 2489), particularly Sections 65 to 83. These sections define tax rates, taxable income, deductions, exemptions, and other relevant provisions related to corporate taxation.
The objectives of these legislative provisions are to ensure fairness, simplicity, and efficiency in the corporate tax system while promoting economic growth, investment, and job creation.
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