Accounting, Audit and Tax Compliance

Thailand's Accounting Act prescribes that all business entities in Thailand shall maintain books of accounts and supporting records in Thailand, and shall prepare annual monetary statements in accordance with Thai Accounting Standards.

The Thai Accounting Act also stipulates that all small business entities in Thailand shall appoint an accountant, who's a Thai national holding a Bachelor of Accounting degree, and shall also appoint a Thai national auditor, who shall audit the books and records plus the annual financial statements of the business enterprise entity in Thailand.

Accordingly, no matter what entity is chosen in Thailand, the entity in Thailand shall employ a Thai national accountant with the suitable qualifications, and moreover, a Thai national auditor with the appropriate qualifications.

Annual reporting to the regulatory authority

All of the entity varieties are needed to file two sets of their audited monetary statements as well as a statutory annual return with the Department of Small business Development under the Ministry of Commerce.

The audited financial statements and statutory annual returns shall be filed within five months of the entity's monetary year-end date. In addition to the audited monetary statements and statutory annual return, a private limited organization entity and an ROH entity in Thailand shall also be needed to hold an annual general meeting of shareholders (which meeting shall be held within four months of the financial year-end date) and shall additionally file a listing of shareholders of the entity with the Department of Enterprise Development as at the date of the annual general meeting of shareholders.

Corporate income tax compliance

All of the entity varieties are necessary to prepare and file an annual corporate income tax return with the Thailand Revenue Department inside 5 months of the entity's monetary year-end date. No extensions are permitted under the Thai Revenue Code, and an automatic surcharge (interest penalty) of 1.5% per month late is payable for all late tax returns filed.

The annual corporate income tax returns are accompanied by one set of the entity's audited monetary statements, and a statement by the entity's director or manager (as the case maybe) certifying as to the entity's tax compliance.

As discussed previously, a representative office entity along with a regional office entity in Thailand is not subject to corporate income tax in Thailand, and the annual corporate income tax returns for these entities are prepared and filed with the Thai Revenue Department for the purposes of monitoring the entity only.

Value added tax compliance

Liability to VAT in Thailand occurs when goods are sold or services are supplied to customers in Thailand, and thus, for all entity types (apart from representative offices and regional offices, that are exempt from VAT in Thailand) the entity could be needed to account for and file VAT returns to the Thai Revenue Department.

Accounting and filing of VAT returns is done on a monthly basis. An entity liable to VAT shall account for its monthly VAT collections, file its VAT for that month and pay the amount of its VAT liability to the Thai Revenue Department inside the 15th day of the following month.

Again, as the Thailand Revenue Code doesn't permit any extensions, all late VAT returns are subject to the 1.5% per month surcharge.