Specific Business Tax in Thailand

Businesses in Thailand that provide goods and services are generally subject to the Value Added Tax (VAT), which is an indirect tax and is levied against the value received or receivable from the supply of goods and services. However, certain types of businesses under the Revenue Code are subject to the Specific Business Tax (SBT), rather than the VAT. The SBT is imposed on certain businesses, such as financial services, where the difference between the production costs and the value-added are not as clear as in other types of businesses. The SBT and VAT were both mandated in 1992 to replace the older Business Tax.

Section 91/5 of the Revenue Code outlines the tax bases for the SBT, which differs depending on the type of business and maybe either: gross receipts, interests, discounts, service fees, other fees, profits from buying and selling bills of exchange and foreign currency. The tax applies to all receivables that result from business activity, whether derived from within Thailand or outside the country.

Section 91/2 subjects the following types of businesses are subject to the SBT:

Type of business according to Section 91/2 Tax bases according to Section 91/5 Tax rate according to Section 91/6
Commercial Banking (a) Interest, discounts, fees, services, gross profits from buying, selling or receiving bills of exchange or debt notes (a) 3.0%
(b) gross profits from exchanging, buying and selling foreign currency, from issuing any bills of exchange or debt notes, and from transferring money to a foreign country (b) 3.0%
Finance, securities and credit foncier (a) Interest, discounts, fees, services, gross profits from buying, selling or receiving bills of exchange or debt notes (a) 3.0%
(b) gross profits from exchanging, buying and selling foreign currency, from issuing any bills of exchange or debt notes, and from transferring money to a foreign country (b) 3.0%
Life insurance Interests, fees, services 2.5%
Pawnshop business Interests, fees, and money, assets, compensation, or any valuable interest received or receivable from selling overdue pawned property 2.5%
Business with regular transactions similar to commercial banking (a) Interest, discounts, fees, services, gross profits from buying, selling or receiving bills of exchange or debt notes (a) 3.0%
(b) gross profits from exchanging, buying and selling foreign currency, from issuing any bills of exchange or debt notes, and from transferring money to a foreign country (b) 3.0%
Sale of immovable property or real estate in a commercial or profitable manner Gross receipts 3.0%
Sale of securities in a securities market Gross receipts 0.1% Currently under exemption
Any other business prescribed by royal decree According to royal decree According to royal decree

There is a municipality tax of 10% imposed in addition to SBT.

 

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Category: Business in Thailand, Company Law

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