Company tax return for house?

[Guderian]

I've owned a house via a company for three years. The company does not own anything else and does not trade. Every year I get the balance sheet done and audited by the DBD with no problems. This year for some reason I've received a yellow envelope with a form in it that I believe is for filing a company tax return (three Thai letters and then 50). I've never heard of anybody doing this for a non-trading company that is just used to own a house, so I went to the local revenue department office and found somebody there who could speak English. I explained the situation and he simply said to throw it away, if the company isn't trading then you don't need to fill it in. I just want to check that this advice is correct - anybody care to tell me?

Edited April 5, 2014 by Guderian

[Arkady]

That is the PNG50 which is your company's corporate income tax return form. Every company needs to file one of these with the RD annually as well as submit audited financial statements to the DBD by end May.

I imagine the accountants that produced your financial statements and got them audited have been submitting your company's tax returns as well but you must know, if whoever is you authorised director is signing returns to the RD or not. You don't need to use the form the RD sends you. That is just as a reminder these days and it's a waste of money sending all that paper around, since you can just download the form. The RD probably advised throwing it away because they assumed your accountant is handling it for you and couldn't be bothered to try to explain how things work in English.

One thing you should be aware of is the practice of auditors to qualify accounts of suspicious shell companies that have no business, for their own protection. The first page of the accounts could be a disclaimer saying that they can't vouch for the accuracy of the statements because the management refused to give them all the information and records they requested. The accounting firm won't bother to translate this page for foreign clients for obvious reasons. A disclaimer like this is naturally a red flag for anyone combing the database for suspicious companies.

You should also be aware that the DBD reserves the right to strike off companies that can't generate any operating income within three years. Operating income doesn't include passive income like rental income, interest or dividends. This wouldn't happen without warning but you could be theoretically be subjected to an inspection to find out what the company is actually doing. Obviously saying that the company is simply a vehicle to get around the Land Code would not be a good explanation. However, so far there is no evidence that any cooperation has ever taken place between the Land Dept and the DBD on a systematic basis to track down dummy companies used by foreigners to hold land. However, it is a good idea to put some operating revenues through the company and make sure its accounts are not being qualified by the auditor, so that it doesn't stick out like a sore thumb.

[Guderian]

Thanks for the reply. I'll check with the accountants.

[Guderian]

I went to see the law office that did my balance sheet yesterday and thought I'd post this as it may be of general interest to people. I admit that I have never had much interest in accounts even when they are in English, so the Thai balance sheet just gets filed with the other company stuff in a dark cupboard every year. If I'd bothered just checking the English cover to the balance sheet I could have answered my own question:

As you can see, the company tax return phor ngor dor 50 is included in the balance sheet so there's nothing to worry about. I'm far from being the only farang who was confused about this (and too lazy to check his own balance sheet), the lady in the law office showed me a large stack of the yellow company tax return envelopes that people had brought along with the same question. As you mentioned they had downloaded the return from the internet so the paperwork sent by the RD is indeed a waste of time and can just be binned.

Thanks for clearing that up anyway.