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Preparing for Year End Payroll

Tax Matters Every Business Owner Should Know

As the year-end approaches, many people may be planning long vacations during the New Year. For business owners, however, there's more to do than just plan for some time off. Proper tax planning and compliance are crucial to prevent potential issues from tax authorities. Whether your business is of any type, paying taxes accurately and on time is essential. Here are some key considerations for business owners to prepare and file taxes:

Pay According to Criteria:

There are two types of income taxes: personal income tax and corporate income tax. For personal income tax, which applies to businesses without legal entity registration, owners need to file taxes twice a year:

  • Year-end tax (Form P.N.D.90, P.N.D.91) in January-March, detailing all income for the past year.

  • Mid-year tax (Form P.N.D.94) in July-September, summarizing income for the first half of the year, with deductions applied if applicable.

Understanding Corporate Income Tax:

Corporate income tax applies to registered legal entities and is calculated based on the net profit. Companies must file twice a year:

  • Mid-year tax (Form P.N.D.51) with a deadline within two months after the end of the first 6 months of the accounting period.

  • Year-end tax (Form P.N.D.50) with a deadline of 150 days from the last day of the accounting period.

Detailed Corporate Income Tax Rates:

Corporate income tax rates depend on the net profit:

  • First 300,000 Baht: Tax exempt.

  • 300,001 - 3 million Baht: 15%.

  • Over 3 million Baht: 20%.

Monthly Tax Obligations:

Aside from semi-annual and annual taxes, businesses must also pay two types of monthly taxes:

  • Income tax withheld at the source.

  • Value Added Tax (VAT) at a rate of 7%.

Proper Documentation for Monthly Taxes:

Monthly taxes include income tax withholding and VAT. Businesses should prepare the necessary forms and documentation, such as withholding tax certificates and VAT invoices, and submit them either through paper forms or online platforms by specific deadlines.

This information provides an overview of crucial tax considerations for business owners. It is advisable to prepare for tax filing well in advance and ensure all documentation is ready to smoothly close the fiscal year.

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