Legal entities subject to income tax

     Many perceive tax matters as complex, complicated, and difficult to understand. However, paying taxes is a significant responsibility, a testament to being a good citizen of a country. In fact, if we learn about the various steps involved in paying taxes and consider advancements in technology, it's evident that taxation isn't as intricate or challenging as it once was.

     Legal entities, which are groups or associations of individuals established under the law to conduct profit-seeking businesses, are obliged to pay taxes. The types of legal entities subject to tax include:

1. Companies or partnerships established under Thai law, such as:

• A) Limited companies
• B) Public limited companies
• C) Limited partnerships
• D) Registered ordinary partnerships

2. Companies or partnerships established under foreign laws, which are required to pay corporate income tax in Thailand if they meet one of the following conditions:

• A) The foreign company or partnership is conducting business in Thailand (Article 66, paragraph 1 of the Revenue Code)
• B) The foreign company or partnership conducts business elsewhere, including in Thailand (Article 66, paragraph 2 of the Revenue Code)
• C) The foreign company or partnership conducts other businesses, including in Thailand, and such businesses involve international transportation (Article 67 of the Revenue Code)
• D) The foreign company or partnership does not conduct business in Thailand, but receives assessable income as per Article 40 (2) (3) (4) (5) or (6), paid from or in Thailand (Article 70)
•  E) The foreign company or partnership that pays corporate income tax in Thailand according to Article 76, paragraph 2, and Article 76 bis of the Revenue Code distributes profit or other forms of income derived from profits, or what is deemed as profit, out of Thailand (Article 70 bis of the Revenue Code)
• F) The foreign company or partnership does not directly conduct business in Thailand, but has employees, agents, or liaisons conducting business in Thailand, resulting in income or profit in Thailand (Article 76 bis of the Revenue Code)

3. Entities conducting commercial operations or profit-seeking activities, such as:

• A) Foreign governments
• B) Organizations of foreign governments
• C) Other legal entities established under the laws of foreign countries

4. Joint Ventures, which refers to commercial or profit-making activities conducted jointly by the following parties:

• A) Company to Company
• B) Company to Partnership
• C) Partnership to Partnership
• D) Company and/or Partnership to an individual
• E) Company and/or Partnership to a group of individuals who are not a legal entity
• F) Company and/or Partnership to Ordinary Partnership
• G) Company and/or Partnership to other legal entities

5. Foundations or Associations that operate and have income, excluding those Foundations or Associations that are designated by the Minister to be organizations or public charities.

6. Legal entities that are determined by the Director-General with the approval of the Minister and announced in the Royal Gazette to be a company or partnership under the Revenue Code.

Source: The Revenue Department, 90 Phaholyothin 7, Phayathai, Phayathai, Bangkok 10400

Tel. +66 2272 8000

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