What is the corporate income tax rate in Thailand?
Thai corporate income tax is 20% of net profit. A small company with paid-up capital of 5 million baht or less and sales of 30 million baht or less pays 0% on the first 300,000 baht and 15% up to 3 million baht.
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Detailed Explanation
## The standard rate
Corporate income tax (CIT) in Thailand is 20% of net profit, worked out on an accrual basis. It is paid by companies and juristic partnerships, including branches of foreign companies. The tax authority is the Revenue Department.
## SME rates
A small company pays:
- 0% on net profit up to 300,000 baht
- 15% from 300,001 to 3,000,000 baht
- 20% above 3,000,000 baht
Both conditions must hold: paid-up capital of 5 million baht or less on the last day of the accounting period, and income from sales and services of 30 million baht or less in the period.
## A worked example
An SME with 1,000,000 baht of net profit pays nothing on the first 300,000 baht and 15% on the next 700,000 baht: 105,000 baht. A company that fails either test pays 200,000 baht.
## How AccountsOS helps
Finn checks both SME conditions against your books and registered capital, estimates CIT and tracks P.N.D.50 and P.N.D.51. You or your accountant file and pay.
Source: https://www.rd.go.th/fileadmin/user_upload/lorkhor/newsbanner/2022/CIT_SME.pdf
Real-World Examples
Small trading company
Paid-up capital 2 million baht, sales 12 million baht, net profit 1 million baht. It qualifies as an SME and pays 105,000 baht.
Larger company
Paid-up capital 10 million baht. It fails the capital test, so all profit is taxed at 20%.
Common Mistakes to Avoid
- Using the SME rates when paid-up capital is over 5 million baht
- Testing capital at the start of the year instead of the last day
Frequently Asked Questions
Is the SME rate automatic?
No. Both conditions must be met for the accounting period.
Do partnerships pay CIT?
Limited partnerships and registered ordinary partnerships do.
Practical Tips
- Check your paid-up capital before year-end if you are close to 5 million baht.
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