Doing business in Thailand is attractive – but only if your accounting and tax compliance are under control. This guide gives foreign owners and managers a clear, practical overview of how accounting and tax work in Thailand in 2025, so you can talk confidently with your Thai accountant, auditor, or lawyer.
Important: This article is for general information only and is not legal or tax advice. For any real transaction or dispute you should consult a Thai-qualified lawyer and licensed accountant.
1. Big picture: how the Accounting and tax in Thailand system works
Thailand is a civil law jurisdiction with a centralised tax system administered mainly by the Thai Revenue Department. For most businesses you will deal with four pillars:
- Corporate Income Tax (CIT) – on company profits
- Value Added Tax (VAT) – on most supplies of goods and services
- Withholding tax (WHT) – tax withheld at source on certain payments
- Personal Income Tax (PIT) – on salaries, dividends and other income of individuals
Residence and source of income
- A Thai company (incorporated in Thailand) is taxed on its worldwide income.
- A foreign company with a permanent establishment or branch in Thailand is taxed on income sourced in Thailand.
Double tax treaties (DTTs) may reduce some withholding tax rates, but you must apply treaty rules correctly and keep documentation.
2. Accounting framework in Thailand
2.1 Accounting laws and regulators
Key legal instruments that affect accounting and bookkeeping include:
- Accounting Act B.E. 2543 (2000)
- Civil and Commercial Code (company law and financial statements requirements)
- Revenue Code (tax rules)
- Accounting Professions Act B.E. 2547 (2004) (governing the profession)
2.2 Thai Financial Reporting Standards (TFRS)
Thailand applies Thai Financial Reporting Standards (TFRS), which are largely based on IFRS with a short time lag.
For non-listed and smaller entities:
- Publicly accountable entities must apply full TFRS.
- Non-publicly accountable entities (NPAEs) may apply TFRS for NPAEs, a simplified framework mainly using historical cost.
In practice:
- SMEs can usually choose between TFRS and TFRS for NPAEs, but should be consistent and consider tax and banking requirements.
- Some foreign-related companies may also be allowed to use IFRS for group reporting, alongside Thai-compliant local accounts.
2.3 Language, currency and record-keeping
Under Thai accounting and tax law:
- Accounting records and financial statements must be:
- in Thai, or in another language with an accompanying Thai translation; and
- written or printed in a durable form (ink, typewritten, printed, or approved electronic form).
- Entities using TFRS for NPAEs must use Thai Baht as the presentation currency, while entities under full TFRS may have more flexibility depending on their functional currency.
Most companies must:
- keep accounting records and supporting documents at least 5 years (often 7 years for tax purposes);
- prepare annual financial statements (statement of financial position, profit and loss, cash flows, changes in equity and notes);
- have them audited by a licensed Thai CPA and filed with the Ministry of Commerce within statutory deadlines.
3. Corporate Income Tax (CIT) in Thailand
3.1 Standard corporate tax rate in 2025
For most companies, the standard corporate income tax rate in 2025 is 20% of net profits.
For qualifying SMEs, a progressive scale applies (subject to legal conditions such as paid-up capital and turnover ceilings):
- 0% on net profits up to THB 300,000
- 15% on net profits from THB 300,001 – 3,000,000
- 20% on net profits over THB 3,000,000
Because SME status depends on detailed criteria, you should have your Thai accountant confirm which rate applies to your company.
3.2 Global minimum tax for large multinationals
Thailand has adopted the 15% global minimum tax (Pillar Two) for large multinational enterprise (MNE) groups, effective 1 January 2025.
- It mainly affects groups with consolidated worldwide revenues above EUR 750 million, not ordinary SMEs.
- For affected groups, additional top-up taxes may be due in Thailand or other jurisdictions if the effective tax rate is below 15%.
3.3 Taxable profits and deductible expenses
In principle, taxable profit is accounting profit adjusted for tax rules. Key points:
- Normal business expenses are deductible if they are wholly and exclusively for the business and properly supported by tax invoices or receipts.
- Certain expenses have limits or are non-deductible, for example:
- excessive entertainment
- some provisions and reserves
- penalties and surcharges
- Depreciation must follow Thai tax rules (which may differ from accounting depreciation).
Losses can generally be carried forward for 5 consecutive accounting periods (no carry-back, and special rules for reorganisations).
3.4 Filing and payment basics
While exact deadlines depend on your year-end and structure, in general:
- Annual CIT return (Form PND.50 for Thai companies) is due within 150 days after the accounting year-end.
- Half-year prepayment (PND.51) may be required for some companies, based on estimated profits.
Late filing or underpayment can lead to surcharges and penalties, so using a local accountant is highly recommended.
4. VAT and other indirect taxes
4.1 VAT rate in Thailand (2025–2026)
Under the Revenue Code, the standard VAT rate is 10%, but the government has long applied a temporary reduction to 7%, which has been repeatedly extended for economic reasons.
Most recently, Thailand extended the 7% VAT rate from 1 October 2025 to 30 September 2026, so the effective VAT rate for most transactions remains 7% through that period.
4.2 Who must register for VAT?
Generally, any person or company that supplies taxable goods or services in Thailand must register for VAT if:
- Annual turnover exceeds THB 1.8 million, or
- Monthly turnover reaches THB 300,000 in some circumstances.
Key points:
- Businesses below THB 1.8 million may stay outside VAT, but cannot issue tax invoices or claim input VAT credits.
- Voluntary VAT registration is allowed and can be beneficial for B2B operations or import-heavy businesses.
- Certain sectors (e.g. some financial services, land transportation, education, healthcare, and rental of immovable property) are exempt from VAT and may fall under Specific Business Tax (SBT) instead.
4.3 VAT mechanics in practice
If your company is VAT-registered:
- You charge output VAT (normally 7%) on taxable sales.
- You recover input VAT on qualifying purchases.
- You file a monthly VAT return (Form PP.30) and pay any net VAT due.
Exports of goods and certain services used entirely overseas can be zero-rated (0%), but require careful documentation (e.g. shipping records, foreign bank payments).
5. Personal income tax (PIT) for owners and expatriates
5.1 Tax residence
For individuals:
- You are treated as tax resident if you stay in Thailand 180 days or more in a calendar year.
- Residents are taxed on income from Thailand and, broadly, on foreign-sourced income remitted into Thailand in the same year (with some complexity and recent policy discussions).
Non-residents are taxed only on Thai-sourced income.
5.2 Personal income tax rates (2025)
Thailand uses a progressive rate system up to 35%. For 2025, widely used brackets are:
- THB 0 – 150,000: Exempt
- THB 150,001 – 300,000: 5%
- THB 300,001 – 500,000: 10%
- THB 500,001 – 750,000: 15%
- THB 750,001 – 1,000,000: 20%
- THB 1,000,001 – 2,000,000: 25%
- THB 2,000,001 – 5,000,000: 30%
- Over THB 5,000,000: 35%
Numerous allowances and deductions may apply (for spouses, children, life insurance, retirement mutual funds, etc.). For foreign executives, the structure of salary, allowances, and benefits in kind can significantly affect effective tax.
6. Bookkeeping, audits, and annual compliance
6.1 Bookkeeping duties
Every company registered in Thailand must:
- Maintain proper books of account showing true and fair financial position and results; MSNA Group+1
- Keep supporting documents (invoices, receipts, bank statements, contracts) in an orderly way, generally for 5–7 years; Benoit & Partners+1
- Ensure entries are in Thai or another language with Thai translation, as noted earlier. Juslaws+4Acclime Thailand+4Thailand Property Law+4
Failing to keep proper accounts can result in:
- Administrative fines
- Estimated tax assessments
- Difficulty obtaining visas, work permits, or financing
6.2 Annual financial statements and audit
Typical annual cycle for a Thai limited company:
- Close accounts on the chosen year-end (commonly 31 December).
- Have financial statements audited by a licensed CPA.
- Hold an Annual General Meeting (AGM) to approve the accounts.
- File audited financial statements and required corporate documents with the Department of Business Development (DBD) and Ministry of Commerce within legal deadlines.
- Submit the annual CIT return to the Revenue Department within 150 days of year-end (as discussed above).
Foreign branches and representative offices have similar, but not identical, obligations and deadlines.
7. Common accounting and tax pitfalls for foreign businesses
Foreign investors in Thailand often run into the same difficulties:
7.1 Underestimating VAT and withholding tax
- Treating Thailand as a “low-tax” jurisdiction and overlooking VAT compliance, especially on service exports, digital services, or complex supply chains.
- Misapplying withholding tax on service fees, royalties, and interest – or failing to obtain DTT certificates of residence to apply treaty rates correctly.
7.2 Mixing personal and company funds
- Using company accounts to pay personal expenses without clear documentation, which can lead to:
- non-deductible expenses
- deemed dividends or benefits in kind
- additional income tax assessments
7.3 Poor documentation and language gaps
- Keeping invoices or contracts only in English, with no Thai translation, making it harder during audits or litigation.
- Relying solely on foreign group accounting policies that are not aligned with Thai tax rules and TFRS/TFRS for NPAEs.
7.4 Ignoring global minimum tax and international reporting
- Large groups overlooking Pillar Two implications and failing to coordinate Thai, regional, and head-office tax strategies.
- Confusion around foreign-sourced income, remittance rules, and international reporting (e.g. CRS, FATCA) where applicable.
8. Practical tips for staying compliant in Thailand
- Engage a Thai-licensed accountant and auditor
- Ensure they understand both local rules and your group’s international structure.
- Align your chart of accounts with Thai tax rules
- Make sure you can easily distinguish deductible vs. non-deductible expenses and track tax adjustments.
- Plan your VAT position early
- Decide whether voluntary VAT registration is beneficial.
- Review your supply chain (imports, exports, local sales) to identify zero-rated and exempt transactions.
- Design a clean documentation workflow
- Issue and collect correct tax invoices.
- Archive bilingual (Thai/English) contracts and key documents.
- Monitor tax-law changes
- VAT rate extensions, SME incentives, global minimum tax rules and customs reforms (such as the upcoming 10% duty on low-value e-commerce imports from 1 January 2026) can all affect pricing and profitability.
- Coordinate tax and immigration planning
- For foreign directors and staff, structure remuneration and employer obligations so that payroll tax, social security, and work-permit requirements are consistent.
Again, these are general guidelines only. Any real decision should be based on tailored advice considering your specific business model, contracts, and group structure.
FAQ – Accounting and Tax in Thailand
1. What is the corporate income tax rate in Thailand in 2025?
The standard corporate income tax (CIT) rate is 20% of net profits for most companies. Qualifying SMEs enjoy a progressive rate: 0% up to THB 300,000, 15% from THB 300,001 to 3,000,000, and 20% above that, subject to legal conditions.
2. What is the current VAT rate and how long will 7% apply?
Legally VAT is set at 10%, but a reduced rate of 7% is in force and has been extended to 30 September 2026, unless changed by future decrees.
3. When must my company register for VAT in Thailand?
You must register if your annual turnover from taxable supplies exceeds THB 1.8 million (or THB 300,000 in a single month in some cases). Businesses below this threshold can register voluntarily but are not obliged to.
4. Do I need to prepare my accounts in Thai?
Yes – Thai law requires that accounts and financial statements be in Thai, or in another language with an attached Thai translation. Many foreign-owned companies keep bilingual records (Thai and English) so that both local authorities and foreign management can use them.
5. Are all companies in Thailand required to have an annual audit?
Most Thai limited companies, including many SMEs, must have their financial statements audited annually by a licensed Thai CPA and file them with the DBD and Revenue Department within legal deadlines.
6. How are foreigners taxed on salary in Thailand?
Foreign employees are generally taxed under the same progressive PIT rates as Thai nationals (0–35%), based on their Thai-sourced income and residence status. Employers must withhold PIT monthly and report it to the Revenue Department.
7. Does Thailand have a global minimum tax for large groups?
Yes. From 1 January 2025, Thailand will implement a 15% global minimum tax regime for large multinational groups, in line with OECD Pillar Two. It mainly affects very large corporate groups with worldwide revenues above EUR 750 million.
Call-to-Action – How Lex Bangkok can support you
Navigating Thai accounting and tax rules can feel overwhelming, especially when you also need to comply with group policies, banking requirements, and immigration rules.
Lex Bangkok works with Thai-licensed accountants, auditors, and tax professionals to help foreign investors:
- choose and implement the right accounting framework (TFRS vs. TFRS for NPAEs);
- structure operations in a way that is tax-compliant and aligned with Thai law;
- coordinate company secretarial, tax, and accounting filings; and
- manage cross-border issues such as double tax treaties and global minimum tax.
If you are setting up a business in Thailand or reviewing your existing structure, you should speak with a Thai-qualified lawyer and a licensed accountant before making any decisions.
Contact Lex Bangkok to arrange a consultation and receive tailored, professional guidance on accounting and tax compliance in Thailand – so you can focus on running and growing your business with confidence.