The payment of income tax by legal entities, using the calculation of net profit, must employ the accrual basis. This means including all income that arises in any accounting period, even if it has not been paid during that period, into the calculation of revenue for that period. Similarly, all expenses related to that income, even if they have not been paid within that accounting period, should be included in the calculation of expenses for that accounting period. The legal entities that need to pay income tax, calculated from net profit, include:

1. Companies or partnerships that are established under Thai law, including

   A. Limited companies

   B. Public limited companies

   C. Limited partnerships

   D. Registered ordinary partnerships

     In the case where companies or partnerships that are established under Thai law have branches, regardless of whether they are in Thailand or abroad, they must include the net profit of the branches with the net profit of the head office for corporate income tax payment in Thailand.

2. Companies or partnerships established under foreign law Companies or partnerships that are established under foreign law and are liable for corporate income tax in Thailand include:

   A. Companies or partnerships established under foreign law that operate elsewhere, including in Thailand, must pay corporate income tax on the net profit specifically derived from operations in Thailand.

   B. Companies or partnerships established under foreign law that have employees, representatives, or agents conducting business in Thailand, which results in income or profits in Thailand, are considered to have the person hired as the employee, representative, or agent, whether they are individuals or legal entities, acting on behalf of the foreign-established company or partnership. Such a person has the responsibility and obligation to submit the tax form and pay income tax specifically related to the said income or profits.

3. Trading or profit-seeking operations carried out by foreign governments, agencies of foreign governments, or other legal entities established under foreign law.

4. Joint ventures.

Data updated on November 14, 2020

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

Tel. +66 2272 8000

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