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Overview of Taxation in Thailand

:: Corporate Income Tax
:: Value Added Tax (VAT)
:: Zero Rated VAT
:: Specified Business Tax (SBT)
:: Personal Income Tax
:: Personal Income Tax Deductions
:: Other Taxes

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Taxation in Thailand - Specified Business Tax (SBT)


A specific business tax of approximately 3 percent is imposed, in lieu of VAT, on the following businesses:
:: Commercial banks and similar businesses
:: Insurance companies
:: Financial securities firms and credit
:: Sales on the stock exchange
:: Sales of non-movable properties
:: Pawn shops
The SBT is computed on the monthly gross receipts at the following rates:
:: Banking or similar business, finance, securities and credit business 3%
:: Insurance business:
- Life insurance 2.5%
- Insurance against loss 3%
:: Pawnshops 2.5%
:: Sales of immovable property in a commercial manner for profits 3%

Remittance Tax
Remittance tax applies only to profits transferred or deemed transferred from a Thailand branch to its head office overseas. It is levied at the rate of 10 percent of the amount to be remitted before tax, and must be paid by the remitting office of the offshore company within seven days of the date of remittance.

However, outward remittances for the purchase of goods, certain business expenses, principle on loans to different entities and returns on capital investment, are not subject to an outward remittance tax.

The tax does not apply to dividends or interest payments remitted out of Thailand by a company or partnership; these are taxed at the time of payment.

Section 70 of the Revenue Code addresses income paid to foreign juristic persons. When a company or partnership incorporated under a foreign law and not carrying on business in Thailand receives "assessable income" paid either from or in Thailand, the payer is usually required to deduct income tax at a rate of 15 percent of the gross remittance.

In 1992, standard deductions, which used to vary with each type of income, were abolished, making the flat 15 percent rate effective on all assessable income except for dividend income, on which the 20 percent withholding tax was reduced to 10 percent.

There is no withholding tax on capital gains or on the share of profit paid to foreign investors in mutual funds, if in the SET. Physical remittance of funds may not interest tax liabilities, which may be incurred by making book entries.

 

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