All material subject to strictly enforced copyright laws. © 2022 ITR is part of the Euromoney Institutional Investor PLC group.

Thailand: AEC and Thai tax competition

To encourage inbound investment and to support the full entry into the Association of Southeast Asian nations Economic Community (AEC) in 2015, the Thai Cabinet, in its meeting of October 2011, resolved to revise the a number of corporate tax rates.

The standard corporate tax rate of 30% will be reduced to 23% of net profit in 2012 and will be reduced to 20% in 2013 onwards.

The corporate tax rate of small and medium enterprises (SMEs) will be as follows:

  • Net profit not exceeding THB 150,000 ($4800) will be exempt from corporate tax;

  • In 2012 onwards, a tax rate of 15% will be applicable for net profit exceeding THB150,000 but not more than THB1 million;

  • In 2012, a tax rate of 23% will be applicable for net profit exceeding THB1 million;

  • In 2013 onwards, a tax rate of 20% will be applicable for net profit exceed THB1 million.

An eligible SME is a company which has paid its capital at the end of the accounting period not exceeding THB5 million and generates income not exceeding THB30 million per accounting period.

A company which listed its shares in the Stock Exchange of Thailand before December 31 2009 will be eligible to a corporate tax rate of 23% in stead of 25% in 2012 and the rate will be reduced to 20% in 2013 onwards.

A tax rate of 25% will be applicable for a listed company in the stock market for alternative investors (MAI) only for net profit not greater than THB50 million in 2011. Where MAI companies are eligible for the previous tax rate of 20% in 2011, the rate of 20% remains.

As a result, the government will lose its tax revenue of around THB150 billion, which will ultimately affect the state revenue in 2012 by about THB52.5 billion.

However, the government believes that this tax measure generate more tax revenue in the long term to compensate such loss. In addition, the Cabinet resolved that the Ministry of Finance and the Board of Investment (BOI) will review the tax privileges under the BOI promotion schemes given to the BOI operators in order to cover the loss of tax revenue arising from the tax rate reduction. The review will take into account the tax holiday offered in other countries in the region for tax competition purposes.

The Thai government will adopt the deficit budget policy in its 2012 budget year. It is foreseeable that tax collection will be heavier and more tax scrutiny will be expanded to new tax bases.

Chinapat Visuttipat (

HNP Counsel Taxand

Tel: +66 0 2632 1800

Fax: +66 0 2632 1332


More from across our site

Japan reports a windfall from all types of taxes after the government revised its stimulus package. This could lead to greater corporate tax incentives for businesses.
Sources at Netflix, the European Commission and elsewhere consider the impact of incoming legislation to regulate tax advice in the EU – if it ever comes to pass.
This week European Commission officials consider legal loopholes to secure minimum corporate taxation, while Cisco and Microsoft shareholders call for tax transparency.
The fast-food company’s tax settlement with French authorities strengthens the need for businesses to review their TP arrangements and documentation.
The full ALP model will be adopted through a new TP regime, which is set to boost the country’s investments and tax certainty.
Tax professionals have called on the UK government to reconsider its online sales tax as it would affect the economy at the worst time.
Tax professionals have called on companies to act urgently to meet e-invoicing compliance targets as the EU plans to ramp up digitisation.
In the wake of India’s ambitious 25-year plan for economic growth, ITR has partnered with leading tax commentators to discuss what the future will look like for India and for the rest of the world.
But experts cast doubt on HMRC's data and believe COVID-19 would have increased the revenue shortfall.
EY’s plan to separate its auditing and consulting businesses might lessen scrutiny from global regulators, but the brand identity could suffer, say sources.
We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree