Tax write-offs for businesses in Thailand

[jakow]

My accountant is saying things about tax write-offs for businesses and I'm hoping someone can confirm if what she's saying is accurate, or if we need to find a new accountant. Basically what she is saying is that you cannot write off anything unless the receipt shows it was purchased for your company. For example, if you buy something for your business on Lazada using your personal account, you cannot write-off that expense for your business. You need need to set up your Lazada account to be a business account so the invoice shows your company name. The company is ran from a home office, so she says we cannot write-off a percent of our internet and electric bills, because the accounts are personal/home accounts and not business accounts. If clients come into town and we take them to lunch for a meeting, and we scan a QR code to pay using our personal banking account, we cannot write that off because it's not from a business banking account and we don't have a bill showing the company name. Is that accurate for how tax write-offs work in Thailand?

[Mike Lister]

Member @Dogmatix will probably be able to answer your question since he also runs a business here, I'm sure he'll be along shortly.

[Misty]

37 minutes ago, jakow said:

My accountant is saying things about tax write-offs for businesses and I'm hoping someone can confirm if what she's saying is accurate, or if we need to find a new accountant. Basically what she is saying is that you cannot write off anything unless the receipt shows it was purchased for your company. For example, if you buy something for your business on Lazada using your personal account, you cannot write-off that expense for your business. You need need to set up your Lazada account to be a business account so the invoice shows your company name. The company is ran from a home office, so she says we cannot write-off a percent of our internet and electric bills, because the accounts are personal/home accounts and not business accounts. If clients come into town and we take them to lunch for a meeting, and we scan a QR code to pay using our personal banking account, we cannot write that off because it's not from a business banking account and we don't have a bill showing the company name. Is that accurate for how tax write-offs work in Thailand?

 

Hi, I've run a business here for c. 20 years. To credit expenses to our company, our accountant needs a "Tax Invoice/ Receipt" that includes certain information about the company.  Usually this is the full name of the company, if it's the head quarters office or a branch office, the company'sThai tax ID number, and the registered business address.  You can pay for items on Lazada with your personal account, but you would still need the Lazada seller to provide you with the Tax Invoice/Receipt.  If your company's official office is listed at your home address, your accountant may agree to allow a portion of certain expenses to be used as business expenses but you will still need to get a Tax Invoice/Receipt from the provider (ISP, utility, landlord, etc) made out as suggested.  Same goes for a business lunch with clients - you would need a Tax Invoice/Receipt from the restaurant made out to the company with all relevant information.

 

 

 

[FritsSikkink]

49 minutes ago, jakow said:

My accountant is saying things about tax write-offs for businesses and I'm hoping someone can confirm if what she's saying is accurate, or if we need to find a new accountant. Basically what she is saying is that you cannot write off anything unless the receipt shows it was purchased for your company. For example, if you buy something for your business on Lazada using your personal account, you cannot write-off that expense for your business. You need need to set up your Lazada account to be a business account so the invoice shows your company name. The company is ran from a home office, so she says we cannot write-off a percent of our internet and electric bills, because the accounts are personal/home accounts and not business accounts. If clients come into town and we take them to lunch for a meeting, and we scan a QR code to pay using our personal banking account, we cannot write that off because it's not from a business banking account and we don't have a bill showing the company name. Is that accurate for how tax write-offs work in Thailand?

Yes, Misty's response is spot on.

[impulse]

10 minutes ago, FritsSikkink said:

Yes, Misty's response is spot on.

 

That would be quite a shocker for those of us that use wadded up Walmart receipts and the torn off stubs from greasy spoon diners to document "business expenses" back home.

 

Good info, from both of you.  Thx!

 

[Chetzee]

slightly off topic , but once a business has been set up and registered  , have users found it fairly straight forward to get a business bank account ? 

[Misty]

47 minutes ago, Chetzee said:

slightly off topic , but once a business has been set up and registered  , have users found it fairly straight forward to get a business bank account ? 

 

My experience is dated from 20 yrs ago, but it was a bit of a catch 22.  In no small part it will depend on the bank and the branch manager.  I first tried KBANK the bank I'd had my personal accounts at for years at that point, and they wouldn't open a business account although the business was set up and registered and the initial capital was sitting in my savings account with their bank. This was because I no longer had my work permit from my former employment, and I didn't yet have a work permit for my new venture. I couldn't get a new work permit until the new business was capitalized - so catch 22.  Went across the street to BBL, and was able to open the business account immediately. Wrote a check off my KBANK account and deposited it in the new BBL account.  BBL has been our corporate bank ever since.

 

Others may have more recent experiences.

[jakow]

2 hours ago, Misty said:

 

Hi, I've run a business here for c. 20 years. To credit expenses to our company, our accountant needs a "Tax Invoice/ Receipt" that includes certain information about the company.  Usually this is the full name of the company, if it's the head quarters office or a branch office, the company'sThai tax ID number, and the registered business address.  You can pay for items on Lazada with your personal account, but you would still need the Lazada seller to provide you with the Tax Invoice/Receipt.  If your company's official office is listed at your home address, your accountant may agree to allow a portion of certain expenses to be used as business expenses but you will still need to get a Tax Invoice/Receipt from the provider (ISP, utility, landlord, etc) made out as suggested.  Same goes for a business lunch with clients - you would need a Tax Invoice/Receipt from the restaurant made out to the company with all relevant information.

 

Thanks @Misty! That's really helpful info. So it sounds like you can't really claim partial personal/business expenses here, e.g. 50% of the internet at the house is used for business purposes and 50% is personal, since (I'm assuming) you couldn't get True to provide a tax invoice for 50% of the bill.

 

Would this tax invoice/receipt be a template type document that I would print out beforehand and bring along with me when purchasing things, and the merchant would just fill in the blanks? I guess for certain larger expenses we would need to go back to the merchant we purchased from in 2023 and have them fill out the document. Most things are ordered online so that's a bit difficult, however recently we've set up our accounts with the business name so next year we shouldn't have any issues.

 

I really appreciate the info!

[jakow]

2 hours ago, impulse said:

 

That would be quite a shocker for those of us that use wadded up Walmart receipts and the torn off stubs from greasy spoon diners to document "business expenses" back home.

 

Good info, from both of you.  Thx!

 

 

Yeah I never realized how lax the US is with business expenses until now 🙂

[Misty]

5 hours ago, jakow said:

 

Thanks @Misty! That's really helpful info. So it sounds like you can't really claim partial personal/business expenses here, e.g. 50% of the internet at the house is used for business purposes and 50% is personal, since (I'm assuming) you couldn't get True to provide a tax invoice for 50% of the bill.

 

Would this tax invoice/receipt be a template type document that I would print out beforehand and bring along with me when purchasing things, and the merchant would just fill in the blanks? I guess for certain larger expenses we would need to go back to the merchant we purchased from in 2023 and have them fill out the document. Most things are ordered online so that's a bit difficult, however recently we've set up our accounts with the business name so next year we shouldn't have any issues.

 

I really appreciate the info!

 

I carry a small piece of paper with my company's info in my wallet to give to any merchant I've not done business with before so they can copy the info into their format.  Many vendors/merchants have saved our company in their system by its business phone number so they just call it up and print off the official receipt. Others (usually restaurants) will hand copy the info onto their own receipts. 

[jakow]

1 hour ago, Misty said:

 

I carry a small piece of paper with my company's info in my wallet to give to any merchant I've not done business with before so they can copy the info into their format.  Many vendors/merchants have saved our company in their system by its business phone number so they just call it up and print off the official receipt. Others (usually restaurants) will hand copy the info onto their own receipts. 

 

Man, I could've googled this for hours (more than I already have) and not have gotten this useful of info. Thanks again!

[Freddy42OZ]

17 hours ago, jakow said:

 

Thanks @Misty! That's really helpful info. So it sounds like you can't really claim partial personal/business expenses here, e.g. 50% of the internet at the house is used for business purposes and 50% is personal, since (I'm assuming) you couldn't get True to provide a tax invoice for 50% of the bill.

 

Would this tax invoice/receipt be a template type document that I would print out beforehand and bring along with me when purchasing things, and the merchant would just fill in the blanks? I guess for certain larger expenses we would need to go back to the merchant we purchased from in 2023 and have them fill out the document. Most things are ordered online so that's a bit difficult, however recently we've set up our accounts with the business name so next year we shouldn't have any issues.

 

I really appreciate the info!

 

Could you rent out a room in your home to the business and perhaps have the business pay 100% of the internet?

[Thalueng]

For partial usage of your house, car, etc. make a rental agreement between you and the company. For items purchased privately sell them to the company after purchase. You cannot claim VAT, but then most sellers on Lazada and the like will not issue a "tax invoice/receipt" for the sale unless you pay 7% on top which means they also do not pay VAT.

[Dancer57]

20 hours ago, Chetzee said:

slightly off topic , but once a business has been set up and registered  , have users found it fairly straight forward to get a business bank account ? 

I had no problem opening one 2 years ago with SCB, who I have held personal accounts with for 17 years. However, the will not give you a company debit card which complicates things when you need to make a purchase. I therefore have to use my personal account debit card and claim it back, then present the receipt to the accountant. The bank required a copy of my company registration and stamp

[Misty]

11 hours ago, jakow said:

 

Man, I could've googled this for hours (more than I already have) and not have gotten this useful of info. Thanks again!

 

You're most welcome.  You can ask for a ใบกำกับภาษี (Tax Invoice/Receipt) and vendors should know what you want

[Misty]

1 hour ago, Thalueng said:

For partial usage of your house, car, etc. make a rental agreement between you and the company. For items purchased privately sell them to the company after purchase. You cannot claim VAT, but then most sellers on Lazada and the like will not issue a "tax invoice/receipt" for the sale unless you pay 7% on top which means they also do not pay VAT.

 

But then you'd have to claim the rental income on your personal Thai income tax return, no?  Unless I misunderstand it sounds like you'd be writing it off the company's expenses (corporate tax deduction), but then reporting it as personal taxable income.  

 

Another way:  get two rental agreements with your landlord - one for the company, one for you. Pay them separately, and get a Tax Invoice Receipt from your landlord for co's expense. If needed have your  auditor review and approve the split between the two as being reasonable. (The company could also pay a portion of other expenses like electricity, etc.)

[Dogmatix]

On 4/30/2024 at 12:06 PM, jakow said:

My accountant is saying things about tax write-offs for businesses and I'm hoping someone can confirm if what she's saying is accurate, or if we need to find a new accountant. Basically what she is saying is that you cannot write off anything unless the receipt shows it was purchased for your company. For example, if you buy something for your business on Lazada using your personal account, you cannot write-off that expense for your business. You need need to set up your Lazada account to be a business account so the invoice shows your company name. The company is ran from a home office, so she says we cannot write-off a percent of our internet and electric bills, because the accounts are personal/home accounts and not business accounts. If clients come into town and we take them to lunch for a meeting, and we scan a QR code to pay using our personal banking account, we cannot write that off because it's not from a business banking account and we don't have a bill showing the company name. Is that accurate for how tax write-offs work in Thailand?

  

Your accountant is correct. You will have to present tax receipts in the company name to claim deductible expenses.  My house was originally purchased in my company name and I set up the utilities in the company name, imagining I could charge all to the company. But the accountant said your office is only about 1/8th of the house, so you can only charge 1/8th of the utilities to the company.  The account vets the documents and hands it to the auditor who trusts her and approves on her say so with only limited scrutiny.  So the accountant is really doing the auditor's job for her.

[khunPer]

On 4/30/2024 at 7:06 AM, jakow said:

My accountant is saying things about tax write-offs for businesses and I'm hoping someone can confirm if what she's saying is accurate, or if we need to find a new accountant. Basically what she is saying is that you cannot write off anything unless the receipt shows it was purchased for your company. For example, if you buy something for your business on Lazada using your personal account, you cannot write-off that expense for your business. You need need to set up your Lazada account to be a business account so the invoice shows your company name. The company is ran from a home office, so she says we cannot write-off a percent of our internet and electric bills, because the accounts are personal/home accounts and not business accounts. If clients come into town and we take them to lunch for a meeting, and we scan a QR code to pay using our personal banking account, we cannot write that off because it's not from a business banking account and we don't have a bill showing the company name. Is that accurate for how tax write-offs work in Thailand?

To my knowledge, you accountant is correct; mine says the same, and it also makes good common sense that business is separated from private...

[Dogmatix]

Talking about tax receipts for the last few years Thai governments have been offering tax deductions for shopping.  It started off at 30k but for the 2024 tax year it was increased to 50k.  You need a tax receipt and from this year it was necessary to buy from a retailer registered in the e-tax receipt system which all the big ones are.  Last year I got e-tax receipts, even though that wasn't yet compulsory.  When I did my tax return online last month the shopping tax deduction just popped up automatically.   If you are married and opt for joint filing, you both get the 50k deduction but the spouse's tax receipts must be in her name.  To get the tax receipts take along your passport and evidence of your TIN.