Thailand Half-Year Corporate Tax Return Filings
Update | September 2015
On 10 September 2015, the Director-General of Revenue repealed his Instruction No Paw 50/2537 concerning half-year tax reasonable excuses and replaced it with Instruction No Paw 152/2558 that prescribes for an additional excuse. This Tax Insight has been updated for the prescription in Paw 152.
Basis for Filing Half-Year Corporate Tax Returns
Half-year corporate tax returns are required to be filed within 2 months after the end of an entity's half-year, which is, for the majority of entities in Thailand, on or before 31 August.
The basis on which half-year tax is to be computed and paid is prescribed in Section 67 bis of the Revenue Code, which basis is as follows:
Corporate Entities that are Required to Estimate Net Profit
For corporate entities that are required to compute and pay their half-year tax on the basis of an estimated amount of net profit for the entire year, Section 67 ter of the Revenue Code prescribes that when the estimated amount of net profit for a year that is lower than the actual net profit for the year by more than 25%, the corporate entity is subject to a penalty of 20% of the shortfall half-year tax not paid.
But the prescription in Section 67 ter includes four more important words … “without a reasonable excuse”. That is, only "without a reasonable excuse" shall a corporate entity be subject to the 20% penalty under Section 67 ter.
It is one of the tax-facts-of-life in Thailand that irrespective of a reasonable excuse being totally honest and legitimate, it is almost impossible to get a Revenue Department tax audit officer to believe you, and the easiest (and safest) way for a corporate entity to have a reasonable excuse is to follow the Director-General's Instruction No Paw 152*, which orders the tax audit officers to allow the following as reasonable excuses:
Accordingly, by simply filing a half-year tax return and paying half-year tax by following 1 or 2, your company will have a reasonable excuse and the tax audit officers cannot impose the 20% penalty under Section 67 ter.
* As issued on 10 September 2015.
This Tax Insight is general information only. It should not be used to determine any particular matter without consulting with an experienced Thailand tax advisor.