In the last few years, Thailand has completely transformed into one of the biggest business hubs in Southeast Asia. Local entrepreneurs and well-established multinational corporations have chosen Thailand to set up businesses. However, most companies don’t realize the importance of accounting services in Thailand. Every Thai and foreign company has multiple obligations related to accounting and tax. In this article, we will briefly explain some things every company should know about before setting up a business in Thailand. This information will help you understand the need and importance of hiring accounting services in Thailand.
Accounting & Annual Audit
Every functioning company in Thailand needs to maintain and prepare accounts. This is not only applicable to limited companies, but also foreign companies, joint ventures and registered partnerships. Only a private individual or sole proprietorship is exempted from this obligation. All the account statements filed by a business organization need to comply with Thai Accounting Standards. They should be true and accurate in portraying the image of a company’s expenses and assets.
In addition to this, a new company needs to close its initial accounting year within 12 months after it has been registered. The balance sheet should also be filled accurately and filed after each period. A business can change its accounting year, but only after it has taken a written approval by the revenue division. All the financial declarations of a company need to be certified and examined by a professional account. Account statements need to be signed and submitted within four months of closing. An approval of shareholders is also needed before filing the statements.
These documents also need to be sent to the commercial registrar and revenue department. If a business is unable to comply with these regulations, it may cause a penalty of 100,000 THB. The accounts and relevant business documents need to be saved and kept for at least five years. In order to make sure everything is done in a proper manner, you need a professional accounting company.
CIT or Corporate Earnings Tax
Every business organization in Thailand needs to have a taxpayer identification number. This needs to be acquired within two months of establishing a business. Tax identification number serves for both CIT and VAT.
VAT
Every company in Thailand needs to be registered for VAT if it comes under any of the following three categories.
Business activities and daily operations of a business are subjected to VAT. For instance, import and export of goods.
If the turnover of the company exceeds 1,800,000 Baht per year. Once a company reaches this figure, it needs to apply for a VAT number within 30 days.
If a company wants to use the services of a foreign national, it is necessary to acquire a work permit from the Government.
Social Security Fund & Payroll Services
For every business organization in Thailand, it is necessary for both employer and employee to contribute 5% earnings to Government funds.
As you can see, it can be tricky and complicated to manage everything on your own. Moreover, if you fail to do it in a proper manner, you may have to pay hefty fines and penalties. Therefore, it is extremely important to hire professional accounting services in Thailand. These companies will manage your finances and accounts to make sure you can focus on other aspects of your business.