Article Category - Accounting Angel

Times are changing in the world. The Taw.Paw .155/2549 was issued to amend # Taw.Paw.1/2528 and provides guidance on the application of accrual basis for certain kinds of businesses. Here's a list of the major changes from Taw.Paw.1/2528:

In the business world, everywhere...including on the Internet, it's not uncommon to hear people willing to trade their goods or services for your goods or services which can take various forms, “ebartering”, if you're looking for the Internet term; or "barter trade" by using barter card member services; or message boards where people post ads saying they are willing to exchange their goods and services In the exchange business, it is common to use a central location, where people from all over sell their goods and services for “barter credits” that they can then use to purchase goods and services from other members.

Doing business is not that easy without keeping track of your records, there are many reasons why organized book-keeping is a good idea. Here are a few: 1. Without them, you really have no way of knowing how well your business is doing. Don’t just leave your book to your accountant for tax return filing purposes only, without checking financial statements monthly- this is placing your business in a risky situation.

Have you ever heard about cases of individuals that are not VAT registrants, but issue false tax invoices and sell these to companies that need tax invoices to back their non-receipt expenses (or under the table expenses)? Most of these cases happen in the construction industry where the sub-contractors have no knowledge about tax and accounting and do not want to declare their revenue to the tax office.

As a business owner, you may wonder why you are called upon so often for an audit from the Revenue Department and may ask, “What exactly is the tax audit policy?” There are four kinds of tax audits in Thailand:

As a small business, do you know that there are some tax benefits that you can use in order to save more tax?

As a Thai company,if your fiscal year(accounting period) is based on the calendar year,you have to file corporate income tax within 150 days after year end no matter whether you have any income or expenses in your business during the year or not and the dead line for accounting period Jan-Dec’06 is to file the tax return within May 30, 2007.

If we talk about filing VAT tax returns, I guess that many of you who are VAT registered companies will think about the Phor. Phor. 30 that has to be filed within the 15th of each month.

In a previous issue, I have already informed you that a company or Limited Partnership in Thailand has the duty by law to withhold tax from their suppliers when paying for certain kinds of services and submit to the Revenue Department. More over, if that juristic person forgets to withhold the tax, they have to pay the tax by themselves plus a penalty and interest of 1.5% per month.

A classic ruling of the Revenue Department that relates to Internet provider services.

The cabinet has approved a plan to reform the 1999 Foreign Business Act to address the widespread practice of foreigners of using nominee Thai shareholders to evade the 49% foreign shareholding limit set under the law.

When a company is paying for services overseas, VAT must be paid on the services if they have been used in Thailand, regardless of whether they were acquired outside of the country.

When paying money overseas withholding tax rates may be reduced or exempted depending on types of income under Double Taxation Agreement (DTA) provisions with the country where the money is to be sent.

Sometimes when running a business here it may be necessary to pay fees to companies that are based overseas. If this happens then we need to know what kind of tax is attached to such a remittance, so that we’re not penalised when we receive our tax audit.

Last month I had a chance to visit an organisation in the UK called EK Williams (EKW). This company runs accounting procedures for firms in a way that we’ve never seen in Thailand, but I think they will be the model for accountancy practices here in the future too.

Any Thai company subject to corporate income tax (CIT) is required to file a half-year tax return by estimating its annual net profit and its tax liability; and must pay half of the estimated tax amount within two months of the end of the first six months of its accounting period.

Doing business is quite hard, but doing business that complies with the tax laws is much harder. Tax laws are not easy to understand, but don’t feel too uncomfortable about it because everyone in the world has the same problem.

By the end of May Thai companies have to file a corporate income tax return, use the following tax preparation checklist to gather the information you will need to prepare your tax return.

I have heard that many small businesses in Phuket – particularly restaurants and bars – are now being invited by the local tax officers to register for VAT. Therefore, I think it is a must that they have a clear understanding of the VAT laws that concern them. So, in this issue I have outlined the VAT laws that focus on small, local businesses.

There has been a storm of criticism over the tax-free sell-off of 73.3 billion bahts worth of Shin Corp shares by the Shinawatra and Damapong families, but Prime Minister Thaksin has said that he believes his critics are motivated by envy of his wealth. It is best not to be envious, because envy harms those who feel it. So today we will follow the PM’s advice and “Try to use your right brain instead of your left,”

“Know us, know them” is the famous strategy of Zoon Woo. As the taxpayer we know who we are and where we are but we don’t know much about tax department policies, therefore, it is a good idea to get to know the strategic plan of our old friend the Revenue Department so that we know what they are planning and what they want to do to us.

Certain types of income paid to companies are subject to withholding tax at the source. The withholding tax rates depend on the type of income and the tax status of the recipient. The payer of the income is required to file a return (Form PND. 3/53) and submit the amount of tax withheld to the District Revenue Offices within seven days of the following month in which the payment is made.

As the end of the year draws near I would like to introduce you to recent tax allowances, the RMF and LTF. You have until December 2005 to invest in both funds to help reduce your personal income tax.

Taxes can be a painful part of every business owner’s life but there are ways to reduce your company’s tax burden if you know how to use business-expense tax deductions and how to avoid non-deductible expenses.

As a foreigner doing business in Thailand, you may know that you have a duty to register a tax ID, file tax returns, co-operate with the tax officers, and of course, you have to pay tax as assessed by tax officers ON TIME. Should a taxpayer fail to pay a complete sum, the assessment officer has the right to seize and sell your assets by auction even without a court decision!

The Revenue Department has a policy to meet every company at least once a year in a “General Visit”. Most often the general visit will be a surprise visit and you will not be informed in advance.

I've been told that this column is to be named “Accounting Angel” because so many people in Thailand are confused about the tax system and good advice from a professional is like an Angel watching over them.