Thailand's SMEs Offered Tax Breaks By Government - Thai Law Firms

The statement also said companies which agree to adopt the practice would be exempted from backdating probes.

 

A common practice among smaller businesses in Thailand is to keep two financial statements, a real one for internal use and an understated one for tax filing. The Finance Ministry is aiming to expand the tax base and it wants to end this practice by providing incentives to business operators.

 

The ministry's statement said companies which have revenue of not more than Bt500 million in the accounting year ending on or before 31 December 2015 and which agree to sign up for the single financial statement program would be exempted from backdating probes.

 

A business that generates sales and revenue of Bt500 million or less each year is considered an SME.

 

Companies can register online to join the program through the Revenue Department's website up to 15 March.

 

Businesses whose tax liabilities are being probed or which have allegedly issued fake tax receipts, evaded taxes or were on trial before 1 January are also eligible to apply. The Revenue Department will take action against these only for pending cases.

 

After signing up, companies are obligated to prepare financial statements that accurately reflect their real situation. They must also refrain from doing anything to evade taxes, and must file and pay their dues properly.

 

Tax breaks are being offered as a bonus for signing up to the program. Businesses with not more than Bt5 million in paid-up capital and Bt30 million in sales revenue in the 2015 accounting year, will enjoy tax breaks for two accounting years.

 

For the 2016 accounting year, the businesses will be exempted from corporate income tax on net profits, and in the following accounting year the first Bt300,000 of their net profits will be tax-exempted and the portion above this will be taxed at 10 per cent.

 

The Finance Ministry hopes the single bookkeeping measure and the tax breaks on offer for SMEs will encourage them to use financial statements which truly reflect their financial positions.

 

It's envisioned the practice will also create a sustainable tax base that reflects Thailand's current economic situation.

 

The ministry meanwhile has stressed this is not a tax amnesty, as they are aimed only at exempting backdating probes, investigation and evaluation.

 

If companies - after joining the program - fail to comply, they will no longer be protected from backdating probes and investigation and, by extension, criminal liabilities under the Tax Code.

 

"There are opportunities being offered by the government here than can be enjoyed by SMEs and at the same time, a single financial statement could help companies more effectively plan strategies going forward", said BSA Law spokesman Apisakdi Kongkangwanchoke.

 

BSA Law is a leading international law firm in Thailand and, like many other law firms, offers a range of legal and financial services, including in the areas of tax consulting, accounting, auditing, Thai labour law, the Thailand work permit process, investment advice and starting a business in Thailand.

 

A number of these companies also have a Thai visa service desk, providing advice and assistance in obtaining a Thai visa. They are also commonly used by foreigners working in Thailand with a Thailand work permit to help them file personal income tax each year, which Thai law requires them to do the same as their Thai colleagues.

Source : articlesbase.com