Corporate Income Tax

[~G~]

In Revenue Department of Thailand I found:

In calculating CIT, deductible expenses are as follows.

1. Ordinary and necessary expenses. However, the deductible amount of the following expenses is allowed at a special rate:

- 200% deduction of Research and Development expense,

- 150% deduction of job training expense,

- 200% deduction of expenditure on the provision of equipment for the disabled;

2. Interest, except interest on capital reserves or funds of the company;

3. Taxes, except for Corporate Income Tax and Value Added Tax paid to the Thai government;

4. Net losses carried forward from the last five accounting periods;

5. Bad debts;

6. Wear and tear;

7. Donations of up to 2% of net profits;

8. Provident fund contributions;

9. Entertainment expenses up to 0.3% of gross receipt but not exceeding 10 million Baht;

10. Depreciation.

</QUOTE]

I do have some questions regarding (1):

- Are benefits for employees of the company included in "ordinary and neccessary expenses"? A Car for the Managing director (owned by the company, of course)? An apartment rented for him by the company? I know that in some countries these things do not qualify as deductable expenses or do only partly. What's the situation in Thailand?

- Job training (150% deductable): does that include language courses?

- R&D expenses (200% deductable): is there a clear definition for that?

I was also a bit surprised reading (9)...

[~G~]

Replies appreciated...

[sajal]

cars and housing for directors are deductable i dunno howmuch just the thing is that the car and the house must be in the company name..

[p_brownstone]

cars and housing for directors are deductable i dunno howmuch just the thing is that the car and the house must be in the company name..

However they are also subject to Personal Income Tax as a benefit in kind.

Patrick

[pomchopkao]

In Revenue Department of Thailand I found:

In calculating CIT, deductible expenses are as follows.

1. Ordinary and necessary expenses. However, the deductible amount of the following expenses is allowed at a special rate:

-  200% deduction of Research and Development expense,

-  150% deduction of job training expense,

-  200% deduction of expenditure on the provision of equipment for the disabled; 

2. Interest, except interest on capital reserves or funds of the company;

3. Taxes, except for Corporate Income Tax and Value Added Tax paid to the Thai government;

4. Net losses carried forward from the last five accounting periods;

5. Bad debts;

6. Wear and tear;

7. Donations of up to 2% of net profits;

8. Provident fund contributions;

9. Entertainment expenses up to 0.3% of gross receipt but not exceeding 10 million Baht;

10. Depreciation.

I do have some questions regarding (1):

- Are benefits for employees of the company included in "ordinary and necessary expenses"? A Car for the Managing director (owned by the company, of course)? An apartment rented for him by the company? I know that in some countries these things do not qualify as deductible expenses or do only partly. What's the situation in Thailand?

- Job training (150% deductible): does that include language courses?

- R&D expenses (200% deductible): is there a clear definition for that?

I was also a bit surprised reading (9)... 

<{POST_SNAPBACK}>

have asked several accounting/finance managers of good sized thai/foreign companies like B. Jucker, Pfizter, Sony and other owners of SMEs and never got any reply (fyi my Co. does corporate training courses including language training, hence my vested interest in the matter). I asked who does our taxes.. zip.

Asked an official of the RD.. double zip.

At the end, frustrated, I sat down with the chief accountant of another largish customer of ours that speaks/understands English very well (classic Mba from abroad etc.), showed her the RD English version website and asked her what she thought of it and if the RD website "in Thai" mentioned the same deductions. She looked but could not find any mention..

I asked her &lt;deleted&gt;? *of course not in those words* and true to her Thai nature she explained “not always do 'they', mean what they write " &lt;deleted&gt;? &lt;deleted&gt;? &lt;deleted&gt;?

so ~G~ maybe our big brothers like Indo Siam or Sunbelt Asia might care to shed some light here..

Points 9 and also 10 are also very interesting *if meant*

[~G~]

In Revenue Department of Thailand I found:

In calculating CIT, deductible expenses are as follows.

1. Ordinary and necessary expenses. However, the deductible amount of the following expenses is allowed at a special rate:

-  200% deduction of Research and Development expense,

-  150% deduction of job training expense,

-  200% deduction of expenditure on the provision of equipment for the disabled; 

2. Interest, except interest on capital reserves or funds of the company;

3. Taxes, except for Corporate Income Tax and Value Added Tax paid to the Thai government;

4. Net losses carried forward from the last five accounting periods;

5. Bad debts;

6. Wear and tear;

7. Donations of up to 2% of net profits;

8. Provident fund contributions;

9. Entertainment expenses up to 0.3% of gross receipt but not exceeding 10 million Baht;

10. Depreciation.

I do have some questions regarding (1):

- Are benefits for employees of the company included in "ordinary and necessary expenses"? A Car for the Managing director (owned by the company, of course)? An apartment rented for him by the company? I know that in some countries these things do not qualify as deductible expenses or do only partly. What's the situation in Thailand?

- Job training (150% deductible): does that include language courses?

- R&D expenses (200% deductible): is there a clear definition for that?

I was also a bit surprised reading (9)... 

<{POST_SNAPBACK}>

have asked several accounting/finance managers of good sized thai/foreign companies like B. Jucker, Pfizter, Sony and other owners of SMEs and never got any reply (fyi my Co. does corporate training courses including language training, hence my vested interest in the matter). I asked who does our taxes.. zip.

Asked an official of the RD.. double zip.

At the end, frustrated, I sat down with the chief accountant of another largish customer of ours that speaks/understands English very well (classic Mba from abroad etc.), showed her the RD English version website and asked her what she thought of it and if the RD website "in Thai" mentioned the same deductions. She looked but could not find any mention..

I asked her &lt;deleted&gt;? *of course not in those words* and true to her Thai nature she explained “not always do 'they', mean what they write " &lt;deleted&gt;? &lt;deleted&gt;? &lt;deleted&gt;?

so ~G~ maybe our big brothers like Indo Siam or Sunbelt Asia might care to shed some light here..

Points 9 and also 10 are also very interesting *if meant*

<{POST_SNAPBACK}>

Thanks, pomchopkao, for sharing your experience. Given the lack of clarity, I begin to suspect that it just comes down to writing everything you think is deductible as such and then having your accountant negotiate with the tax authorities.

After a few times of doing that, hopefully we can get a better picture. However, I don't know if this way of doing that will help you market your language courses.