Thai taxes...

[Mook23]

I've never understood the thai TAX system and before u start bashing me (or the the Thai) after 15 years I still don't get it (in full).

So I'm basing myself on 2 real-life examples: 1. A local shop 2. A local motel.

Both places are owned by friends, the shop is successful as is the local motel (15 rooms).

The shop sells Leo @55THB. The motel sells rooms at 450THB (with a/c).

When I ask them about the TAXES they look at me like I'm from another planet. Beer dude says he purchases the beers at +/- 49/large botle (including tax) and he pays a ridiculously fee (permit fee) each year allowing him to sell the beer. I understand. But my question is does he pay INCOME TAX? Does he have to declare each trimestre how many bottles he sold (I know the answer is NO but how do these people get taxed???). Same applies to hotel room. My lady friend tells me she is charged for billboards and the fact she sells alcohol (permit) but she cannot give me a straight answer wether she is charged on the INCOME (ie. this month all rooms were sold = basically the hotel is sold out each month so she gets +/-200.000thb). she pays staff (5 people) with that amount but does she pay any TAX (eahc trimestre, or each year) ????

If i sell Leo at 55thb at home I pay +/- 9thb VAT* on that amount* as well as INCOME TAX (+/- 40%).

[kannot]

It seems many declare nothing to the tax dept. maybe the taxman investigates and gets paid a bribe to shutup?

[blackcab]

For a small business some taxes are avoidable and some are not. You mentioned a billboard. Most businesses have to pay sign tax to the district office. The company I work for pays about 400 baht per year sign tax for quite a large sign.

The district office also collects par see rong ruan, which is a tax on the commercial use of property. This tax can be negotiated and the officer assessing this tax has a lot of discretion. The building owner is normally liable for this.

Both businesses will pay VAT on the goods they purchase, but they do not have to register to report VAT with a turnover of less than 1.8m baht per year.

Corporate income tax is not payable on profits below 300,000 baht per year.

[Mook23]

Both businesses will pay VAT on the goods they purchase, but they do not have to register to report VAT with a turnover of less than 1.8m baht per year.

Corporate income tax is not payable on profits below 300,000 baht per year.

Thx. The VAT rule I knew, the other one I didn't. I suppose many businesses make more than 300.000thb but there is no control as there is no cashier system and it's cash driven (not card payment).

[stevenl]

Both businesses will pay VAT on the goods they purchase, but they do not have to register to report VAT with a turnover of less than 1.8m baht per year.

Corporate income tax is not payable on profits below 300,000 baht per year.

Thx. The VAT rule I knew, the other one I didn't. I suppose many businesses make more than 300.000thb but there is no control as there is no cashier system and it's cash driven (not card payment).

Small businesses with annual profit over 300k? Not many. Don't forget that salary etc is not part of that.

[Don Mega]

I would have thought income tax is paid on the salary he is drawing not the bottle of beer he is selling.

[Mook23]

300.000 is only 25.000/month. It's above average but nothing extraordinary for people running local hotel. Yet I dont see much accounting going on. Unless they are taxed a flatrate amount each year based on nr of room and price per room. Cheers

[Mook23]

I would have thought income tax is paid on the salary he is drawing not the bottle of beer he is selling.

My biz back home I need to keep logs of all I sell. I'm a small biz too with no employees.

[Don Mega]

I would have thought income tax is paid on the salary he is drawing not the bottle of beer he is selling.

My biz back home I need to keep logs of all I sell. I'm a small biz too with no employees.

Corporate Tax ?

[stevenl]

300.000 is only 25.000/month. It's above average but nothing extraordinary for people running local hotel. Yet I dont see much accounting going on. Unless they are taxed a flatrate amount each year based on nr of room and price per room. Cheers

300k profit. Besides that he has his salary, which will be taxed according to income tax regulations.

[Don Mega]

300.000 is only 25.000/month. It's above average but nothing extraordinary for people running local hotel. Yet I dont see much accounting going on. Unless they are taxed a flatrate amount each year based on nr of room and price per room. Cheers

Small company 300k net profit = no tax.

Small company 300k to 3million net profit = 15% tax.

Small company 3 million + net profit = 20% tax.

[Mook23]

I would have thought income tax is paid on the salary he is drawing not the bottle of beer he is selling.

My biz back home I need to keep logs of all I sell. I'm a small biz too with no employees.

Corporate Tax ?

Both vat and income tax.

[Don Mega]

I would have thought income tax is paid on the salary he is drawing not the bottle of beer he is selling.

My biz back home I need to keep logs of all I sell. I'm a small biz too with no employees.

Corporate Tax ?

Both vat and income tax.

If turnover less than 1.8 million no VAT.

http://www.rd.go.th/publish/6043.0.html

[Mook23]

Thank you don. So u suggest the 15 room hotel generates a certain monthly income which pays the staff (4 people full time) as well as the owner fixed salary? I hadn't thought about that as it's a small family owned place and thought it was sole proprietor. Cheers

[wprime]

Company tax isn't fixed and from the zero dollar? What's stopping people from setting up multiple small companies under one umbrella company to stay below the tax threshold?

[blackcab]

Company tax isn't fixed and from the zero dollar? What's stopping people from setting up multiple small companies under one umbrella company to stay below the tax threshold?

It happens, but more as a way of reducing tax rather than eliminating it.