Thailand VAT Income Reconciliations
Tax Insight | April 2013
As you are preparing your year-end corporate tax return, there is a little reconciliation that should be done before you finalize and file the corporate tax return, i.e. a reconciliation of the income reported in your twelve PP30 VAT returns to the income reported in the year-end PND50 corporate tax return.
This reconciliation is one of the checks that the Revenue Department audit officers perform during a Business Operation Visit, and should the Revenue audit officers discover that the income amounts do not reconcile, you may be inadvertently exposing your company to the more extensive tax investigation, because when it doesn't reconcile it indicates to the audit officers that they have good chance to catch you for either a shortfall of VAT income or CIT income, and this sparks the Revenue officers' attention.
So, whilst this reconciliation is not a mandatory procedure for companies in Thailand, it is a wise thing to do.
If your company is a supplier of goods only (not a services provider) accounts receivables should not be reconciling items. This is because for sales of goods, the tax point for VAT purposes (i.e. the point in time when a tax invoice is required to be issued) is generally the same point in time when income is required to be recognized for CIT purposes.
If, after performing the reconciliation, the incomes do not reconcile, you should then take the necessary action straight away (before the Revenue officers discover the discrepancy). For example, if any one or more of your PP30 VAT returns is incorrect, you should immediately correct those returns by filing additional/amended returns and pay the additional/amended amount of tax. Because doing so significantly reduces the amount of penalty and surcharge that would otherwise apply if the Revenue officers discover the incorrect VAT returns.
This is a general information Tax Insight Article only. It should not be used to determine any matter without consulting with an experienced Thailand tax advisor.