Sme And Corporate Tax Reduction

Recently, due to the flooding, the Royal Thai Government issued Royal Decree 530 to cut corporate income tax for 3 consecutive accounting periods.

The accounting period beginning on or after January 1, 2012 will see a reduction of corporate tax to 23 % from 30 % for one accounting period.

The tax on profits will be reduced to 20% for two subsequent accounting periods beginning on or after January 1, 2013.

Section 6 of the same decree reduces corporate tax for small and medium enterprises (SME) whose paid up capital does not exceed 5 million baht and whose gross annual revenue is 30 million Baht or less. Those whose profit is less than 150,000 Baht are exempt from corporate tax, while those from 150,001 Baht to 1 million Baht will be charged a 15% tax rate.

For those SME companies that earn more than 1 million Baht in profit they will be taxed 23% for the accounting period beginning on or after January 1, 2012 and 20% for the accounting period beginning on or after January 1, 2013.

The new rate for SME companies does not have a validity period which makes it different from the corporate tax which is good from 2012-2014.

The Securities and Exchange Commission proposed a tax waiver on dividends paid by listed companies to the Royal Thai Government to encourage more companies to list their shares. The current tax is 10%. A decision on this proposal has not yet been reached but when it is we will post more here.

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