A specific business tax of approximately 3 percent is
imposed, in lieu of VAT, on the following businesses:
:: Commercial banks
and similar businesses
:: Insurance companies
:: Financial securities
firms and credit
:: Sales on the
stock exchange
:: Sales of non-movable
properties
:: Pawn shops
The SBT is computed on the monthly gross receipts at
the following rates:
:: Banking or similar
business, finance, securities and credit business 3%
:: Insurance business:
- Life insurance 2.5%
- Insurance against loss 3%
:: Pawnshops 2.5%
:: Sales of immovable
property in a commercial manner for profits 3%
Remittance
Tax
Remittance tax applies only to profits transferred or
deemed transferred from a Thailand branch to its head
office overseas. It is levied at the rate of 10 percent
of the amount to be remitted before tax, and must be
paid by the remitting office of the offshore company
within seven days of the date of remittance.
However,
outward remittances for the purchase of goods, certain
business expenses, principle on loans to different entities
and returns on capital investment, are not subject to
an outward remittance tax.
The
tax does not apply to dividends or interest payments
remitted out of Thailand by a company or partnership;
these are taxed at the time of payment.
Section
70 of the Revenue Code addresses income paid to foreign
juristic persons. When a company or partnership incorporated
under a foreign law and not carrying on business in
Thailand receives "assessable income" paid
either from or in Thailand, the payer is usually required
to deduct income tax at a rate of 15 percent of the
gross remittance.
In
1992, standard deductions, which used to vary with each
type of income, were abolished, making the flat 15 percent
rate effective on all assessable income except for dividend
income, on which the 20 percent withholding tax was
reduced to 10 percent.
There
is no withholding tax on capital gains or on the share
of profit paid to foreign investors in mutual funds,
if in the SET. Physical remittance of funds may not
interest tax liabilities, which may be incurred by making
book entries.
