Mid Year Corporate Tax

[Zen]

In case there's an over-estimate of profits during the submission of the mid year tax form, will the revenue deparatment do a refund at the end of the year? Or will they just swallow up the tax paid during mid year?

What are the consequences of an over or under estimation?

Thanks

[Sunbelt Asia]

In case there's an over-estimate of profits during the submission of the mid year tax form, will the revenue deparatment do a refund at the end of the year? Or will they just swallow up the tax paid during mid year?

What are the consequences of an over or under estimation?

Thanks

All Thai companies are subject to CIT, which is required to file half year tax by estimating its annual net profit as well as its tax liability and they then must pay half of the estimated tax amount within two months after the end of the first six months of its accounting period. Therefore the company who has an accounting year as calendar year (Jan.-Dec.) will have to file its semi annual income tax return and pay tax (if any) within the end of August.

The prepaid tax can be used as tax credit against its annual tax liability.

As the half year tax is filing base on estimated annual profit, there will be surcharge of 20% of the tax underpaid if the estimated profit is more than 25 % lower than the final profit

For example, you estimated the whole year profit of 100,000 Baht ,then you file and paid the half year profit 50,000 and pay tax 15% =7,500 Baht for a SME company.

but at the end of year ,you found that your actual profit is 150,000,which is 50,000 more than the estimation ,means the estimated is lower than actual =33.33% ((50000/150000)*100)

The correct semi annual tax is 11,250

But we have paid for 7,500

Tax under paid 3,750

Surcharge 20% of 7,500 is 750 Baht

As many companies complained to the tax dept. about paying surcharge if the estimation was wrong, then they issue one announcement called Paw.50/2537 in order to help solving the problems, this law says if the company paying the half year tax is not less than 50% of the CIT paid in previous accounting period there will be no surcharge even if the tax at the end of year is higher than the estimation of more than 25%

Now, you have your choice, paying tax based on your real estimation and take the risk or play safe by paying half year tax not less than 50% of last year tax.

www.sunbeltasiagroup.com

[Chang_paarp]

SNIP

For example, you estimated the whole year profit of 100,000 Baht ,then you file and paid the half year profit 50,000 and pay tax 15% =7,500 Baht for a SME company.

but at the end of year ,you found that your actual profit is 150,000,which is 50,000 more than the estimation ,means the estimated is lower than actual =33.33% ((50000/150000)*100)

The correct semi annual tax is 11,250

But we have paid for 7,500

Tax under paid 3,750

Surcharge 20% of 7,500 is 750 Baht

SNIP

www.sunbeltasiagroup.com

Last time I looked 20% of 7,500 was 1500

What you are saying is it is better to over pay your tax mid year than under pay.

Consider it an interest free loan to the tax dept. Or a deposit on the future liability.

[Tompa]

Sunbelt, I'm interested in the same question as the OP.

What happens if you overpay in the mid-year? Would they refund you at the end of the year or not? I understand that you can use the overpayment as credit towards the end of the year taxes, but what if there is is still credit due to you? If they wouldn't refund that wouldn't that be considered theft?

To use Sunbelt's example,

You estimated the whole year profit of 100,000 Baht ,then you file and paid the half year profit 50,000 and pay tax 15% =7,500 Baht for a SME company.

but at the end of year ,you found that your actual profit was only 25,000, so the actual tax for the whole year should be 3,750. Would they now refund the other 3,750 or not?

Thanks,

Tompa,

[Sunbelt Asia]

The correct semi annual tax is 11,250

But we have paid for 7,500

Tax under paid 3,750

Surcharge 20% of 7,500 is 750 Baht

Typo of 7,500 Baht ( it should be 3,750... the same listed as underpaid).

Hence the amount of surcharge is correct

Surcharge 20% of 3,750 is 750 Baht

What you are saying is it is better to over pay your tax mid year than under pay.

Consider it an interest free loan to the tax dept. Or a deposit on the future liability.

Better to overpay. As no savings acct in Thailand pays the same as the penalty.

What happens if you overpay in the mid-year? Would they refund you at the end of the year or not?

You are able to get a refund

I understand that you can use the overpayment as credit towards the end of the year taxes, but what if there is is still credit due to you? If they wouldn't refund that wouldn't that be considered theft?

.

They give you the money. Have heard of others getting a refund and I myself have gotten one with no problem.

www.sunbeltasiagroup.com

[Zen]

Sunbelt,

I just heard from someone that if the mid year tax estimate was 25% higher than the actual profit, there will be a penalty too??

For example, if I had estimated my profits to be 375,000baht, but my actual profit turned out to be only 277,500baht (which is 26% less than my estimate), then I have to pay a tax penalty too.

Is this true?

[Martin_F]

Sunbelt,

I just heard from someone that if the mid year tax estimate was 25% higher than the actual profit, there will be a penalty too??

For example, if I had estimated my profits to be 375,000baht, but my actual profit turned out to be only 277,500baht (which is 26% less than my estimate), then I have to pay a tax penalty too.

Is this true?

Zen, I have not heard of the overpayment penalty.

There may be some other reasons why there was a penalty.

The main question is how can they fine you for paying too much tax... but then we won't go into the VAT stories here...

[siriratc]

Dear Sunbelt

I wish you will give credit to the source of your information in professional way

Thanks,

In case there's an over-estimate of profits during the submission of the mid year tax form, will the revenue deparatment do a refund at the end of the year? Or will they just swallow up the tax paid during mid year?

What are the consequences of an over or under estimation?

Thanks

All Thai companies are subject to CIT, which is required to file half year tax by estimating its annual net profit as well as its tax liability and they then must pay half of the estimated tax amount within two months after the end of the first six months of its accounting period. Therefore the company who has an accounting year as calendar year (Jan.-Dec.) will have to file its semi annual income tax return and pay tax (if any) within the end of August.

The prepaid tax can be used as tax credit against its annual tax liability.

As the half year tax is filing base on estimated annual profit, there will be surcharge of 20% of the tax underpaid if the estimated profit is more than 25 % lower than the final profit

For example, you estimated the whole year profit of 100,000 Baht ,then you file and paid the half year profit 50,000 and pay tax 15% =7,500 Baht for a SME company.

but at the end of year ,you found that your actual profit is 150,000,which is 50,000 more than the estimation ,means the estimated is lower than actual =33.33% ((50000/150000)*100)

The correct semi annual tax is 11,250

But we have paid for 7,500

Tax under paid 3,750

Surcharge 20% of 7,500 is 750 Baht

As many companies complained to the tax dept. about paying surcharge if the estimation was wrong, then they issue one announcement called Paw.50/2537 in order to help solving the problems, this law says if the company paying the half year tax is not less than 50% of the CIT paid in previous accounting period there will be no surcharge even if the tax at the end of year is higher than the estimation of more than 25%

Now, you have your choice, paying tax based on your real estimation and take the risk or play safe by paying half year tax not less than 50% of last year tax.

www.sunbeltasiagroup.com

[Chang_paarp]

Dear Sunbelt

I wish you will give credit to the source of your information in professional way

Thanks,

It is the tax act. If Thailand is like most countries, you measure it in Kg not pages.

Look at the tax dept web site if you want confirmation.

Greg has explained the concept in simple terms so us dummies can understand without having to become CPA's. He'll be able to quote the name of the act when he checks this part of the forum next.

[siriratc]

In case there's an over-estimate of profits during the submission of the mid year tax form, will the revenue deparatment do a refund at the end of the year? Or will they just swallow up the tax paid during mid year?

What are the consequences of an over or under estimation?

Thanks

There will be penalty on under payment but not on over payment which you also able to ask for refund, if you dare for ,as asking for refund means you invite them to check your book before getting refund.