How is a Thai company taxed?

Key Takeaways

• Corporate income tax is 20 percent. A qualifying small company pays 0, 15 and 20 percent across three bands, under a decree from 2015 that the Revenue Department’s own website has not caught up with.
• The PND 51 half-year return catches people every year. Underestimate your annual profit by more than 25 percent and a 20 percent surcharge lands on the shortfall, and the rule everyone credits to the wrong document.
• VAT is legally 10 percent and has run at a reduced 7 percent since 1992. The current concession was just extended to 30 September 2027, though most published guides still say it ends in 2026.
• Domestic withholding applies before any Singapore treaty relief: 5 percent on rent, 3 percent on services. The 1 percent e-withholding concession lapsed on 31 December 2025 and some guidance still quotes it.

In Detail

Residence follows incorporation, not management

Thailand tests corporate tax residence by where a company is incorporated, not where it is managed or controlled.¹ A Thai-incorporated company is taxed on its worldwide income. A foreign company, including a Singapore parent trading into Thailand without setting up locally, is taxed only on its Thailand-source profits, on a territorial basis under Revenue Code Sections 66 and 76 bis.¹ There is no separate management-and-control test layered on top, which is one less thing to argue about than in jurisdictions that run both tests at once.

Corporate income tax: 20 percent, and a decree the government’s own page has not caught up with

The standard corporate income tax rate is 20 percent of net profit.¹ A qualifying small company pays less, in three bands: 0 percent on net profit from THB 0 to 300,000, 15 percent on the portion from THB 300,001 to THB 3,000,000, and 20 percent on the remainder.² To qualify, paid-up capital must not exceed THB 5 million and revenue from sale of goods or services must not exceed THB 30 million in the accounting period.²

The legal basis is Royal Decree No. 583 B.E. 2558 (2015), amending Royal Decree No. 530 B.E. 2554 (2011), and it sets this exact three-band structure for accounting periods commencing on or after 1 January 2015.² That is worth stating plainly because a page still live on the Revenue Department’s own site describes the small-company rate as a single reduced rate under the 2011 decree, 23 percent stepping down to 20 percent, with no 0 percent band and no THB 300,000 or THB 3,000,000 breakpoints.³ That page was never updated after the 2015 amendment. It is a government source describing government policy incorrectly. This is exactly why this guide cites the decree text itself rather than a summary page, government or otherwise: the summary page can be wrong even when the underlying law is settled.

The PND 51 trap

Most companies file two corporate tax returns a year. PND 51 is the half-year return, due within two months of the close of the first six months of the accounting period, 31 August for a calendar-year company.⁴ At that point you estimate full-year net profit and pay tax on half of the estimate.⁴ PND 50, the annual return, follows 150 days after the accounting period closes, 29 or 30 May for a calendar-year company.⁴

The trap is in the estimate. If your PND 51 projection understates actual full-year net profit by more than 25 percent, without reasonable cause, a 20 percent surcharge applies to the tax shortfall. That is a penalty on the gap between what you estimated and what you actually made, not a fixed fine, and it can be a large number on a profitable second half.

Here is the correction worth having: almost every secondary source attributes both the 25 percent margin and the 20 percent surcharge to Revenue Department Director-General’s Instruction No. Paw. 50/2537. That instruction does not set the penalty. We fetched it directly. It defines only the reasonable-cause safe harbour: a company has reasonable cause, and avoids the surcharge, if its half-year estimate is not less than half of the previous year’s actual net profit.⁵ The 25 percent margin and the 20 percent surcharge themselves come from Revenue Code Section 67 Ter. Getting this distinction right matters if you ever need to argue reasonable cause on grounds the instruction does not cover.

Losses: five years forward, nothing back, no group relief

Tax losses carry forward for five accounting periods. There is no carryback.¹ Thailand also has no group relief: one company’s losses cannot offset another group company’s profits, even within a wholly-owned Thai structure.¹ A Singapore group used to indefinite carry-forward and a year of carryback at home should plan Thai entity profitability on its own terms, not net it against the rest of the group. That specific Singapore comparison is not one this registry could independently source, so treat it as background rather than a cited fact.

VAT: 10 percent on paper, 7 percent in practice, until a date that keeps moving

The statutory VAT rate under the Revenue Code is 10 percent. Since 1992 Thailand has run a reduced rate of 7 percent, renewed by Royal Decree roughly every one to two years rather than made permanent.⁶ That is the number that reverts to 10 percent if a renewal is ever missed.

The most recent cycle: Royal Decree No. 799 B.E. 2568 held the rate at 7 percent through 30 September 2026.⁷ Cabinet then approved a further extension, and the enabling Royal Decree No. 807 B.E. 2569 was gazetted in August 2026, taking effect 1 October 2026 and holding the 7 percent rate through 30 September 2027.⁷⁸ A great deal of content written before that gazettal still states the concession expires in 2026. It does not. Check the date on anything you read about this, including this guide, since the pattern is a renewal roughly every year.

Registration is required once revenue from goods or services sold in Thailand exceeds THB 1.8 million a year.⁹ VAT is filed monthly on Form PP.30, including nil months, due on the 15th of the following month for paper filing, extended to the 23rd for e-filing.¹⁰ Zero-rating (0 percent, with input tax still creditable) covers exports of goods, services consumed entirely outside Thailand and paid in foreign currency, international transport, and sales into export processing zones. Exemption (no VAT charged, and no input tax credit) covers groceries, unprocessed agricultural products, education, healthcare, domestic transport, property leasing and sale, and anyone below the THB 1.8 million threshold.⁶

Withholding tax: what a Thai payer deducts before you see the money

Domestic withholding applies before any treaty relief is even in the conversation. The Revenue Department’s own Section 3 Ter table sets rent at 5 percent and service fees, including professional fees and hire of work, at 3 percent.¹¹ Domestic dividends carry 10 percent withholding, and the general domestic rate on Thailand-source income paid to a foreign company without a Thai permanent establishment is 15 percent.¹²

A one-year concession cut the electronic withholding rate to 1 percent for payments made through the e-Withholding Tax system. It lapsed on 31 December 2025. Standard rates have applied to e-Withholding payments since 1 January 2026, regardless of filing method.¹⁰ Some 2026 content still quotes the 1 percent rate. It is gone.

The Singapore-Thailand tax treaty caps most of these rates lower for a genuine Singapore counterparty, on dividends, interest and royalties, but only if you claim it correctly, with the right paperwork in place before payment. That mechanics belongs in getting profits back to Singapore.

Specific Business Tax: the cases VAT does not reach

A handful of activities sit outside VAT entirely and pay Specific Business Tax instead: 3 percent of gross receipts on commercial banking and finance business, including certain intercompany lending, and 2.5 percent on life insurance business.⁶ Sale of immovable property as a business or for profit pays SBT too, currently at a reduced 0.1 percent rather than the full rate.⁶ A 10 percent municipal tax surcharge is added on top of the SBT amount in every case, the same way the 7 percent VAT rate already bakes in a municipal component.⁶

Transfer pricing starts to bite past THB 200 million

Thailand’s arm’s-length principle applies to related-party transactions regardless of size. The filing obligation does not: entities with total annual revenue of THB 200 million or less are exempt from the Transfer Pricing Disclosure Form, though they remain bound by the underlying arm’s-length rule. Above that threshold, the disclosure form is filed alongside the annual PND 50 cycle. Local File documentation, prepared in Thai to an OECD-aligned structure, must be produced within 60 days of a Revenue Department request, commonly extended to 180 days on a first request, and retained for five years from the date the disclosure form was filed. Failing to file, or filing an inaccurate or incomplete disclosure, can attract a fine of up to THB 200,000 per violation.

A Singapore SME crossing into Thailand at 5 to 50 staff is unlikely to hit THB 200 million on its own. A subsidiary billing heavily to or from its Singapore parent can get there faster than the headcount suggests, since the threshold is revenue, not profit or staff count.

What this means for you

None of these numbers are exotic. A 20 percent standard rate, a reduced SME band, monthly VAT, and withholding on rent and services are all things a Singapore finance team can build a calendar around in a week. The risk is not the rates. It is trusting a summary page, a 2025 guide, or last year’s PND 51 estimate past the date it stopped being true.

Before your first PND 51 filing

• Does your paid-up capital and revenue actually qualify for the SME CIT band, checked against Royal Decree 583/2558, not a summary page?
• Is your PND 51 half-year estimate at least half of last year’s actual net profit? That is the safe harbour that avoids the Section 67 Ter surcharge.
• If you are past THB 1.8 million in revenue, are you registered for VAT and clear on whether you file paper (15th) or electronically (23rd)?
• Has anyone on your team quoted the 1 percent e-withholding rate recently? It lapsed 31 December 2025.
• Does any of your revenue come from real estate sale or financial income? That is Specific Business Tax, not VAT, and the rates differ.
• If group revenue is approaching THB 200 million, has anyone checked whether transfer pricing disclosure now applies to you?

Sources

12 sources for this article, 5 of them primary. Where we could not verify something, the article says so rather than estimating.

1. PwC Worldwide Tax Summaries, taxsummaries.pwc.com
2. Thai Revenue Department (primary), www.rd.go.th
3. Thai Revenue Department (primary), www.rd.go.th
4. PwC Worldwide Tax Summaries, taxsummaries.pwc.com
5. Thai Revenue Department (primary), www.rd.go.th
6. PwC Worldwide Tax Summaries, taxsummaries.pwc.com
7. HLB Thailand, www.hlbthai.com
8. Forvis Mazars, www.forvismazars.com
9. Thai Revenue Department (primary), www.rd.go.th
10. Grant Thornton Thailand, www.grantthornton.co.th
11. Thai Revenue Department (primary), www.rd.go.th
12. PwC Worldwide Tax Summaries, taxsummaries.pwc.com

This article is general information about doing business in Thailand and is not legal, tax, or financial advice. Every figure is cited with its source and its date. Thai regulation is changing quickly and rules current at publication may change without notice. Confirm anything you intend to act on with qualified Thai counsel.