Taxation in PICO Finance

The document outlines the taxation requirements for businesses operating as Pico finance entities in Thailand. Below is a summary of the key points. Likewise also see other issues on this website. Likewise also see the articles on the what is a Pico license as well as the micro finance debt collecting.

Duties and Responsibilities

1. Registration and Compliance:

– Register for specific business taxes: Pico Finance businesses must register for the relevant taxes.

– Perform other related duties: These may include additional compliance and regulatory requirements.

2. Tax Filing and Payment:

– File a tax return and pay taxes: Compliance with the Revenue Code is mandatory, including filing returns and making timely payments.

Financial Reporting

1. Prepare Accounts and Financial Statements:

– Must comply with the Accounting Act 2000 andAccounting Standards.

2. Submit Financial Statements:

– Financial statements must be submitted as part of regular business operations.

Types of Taxes for Pico Finance Businesses

1. Corporate Income Tax (CIT):

– Collected from all income received.

– Rate: 20% of net taxable profit.

– SMEs: Different rates apply for SMEs based on their net profit and capital.

2. Withholding Tax (WHT):

– Applicable when the payer is a juristic person.

3. Specific Business Tax (SBT):

– Collected from all income received.

– Calculation: Tax base value (income from interest, fees) x tax rate (3.3%).

4. Stamp Duty:

– Collected from contract instruments: Various rates apply depending on the transaction type and amount.

Income Considerations

1. Types of Income:

– Interest income: From loan contracts.

– Service income: Related to lending activities.

2. Thresholds and Registration:

– Businesses with annual income exceeding 1.8 million baht from product sales or services must register for VAT within 30 days of surpassing this threshold.

VAT (Value-Added Tax)

1. Applicability:

– Income under hire-purchase contracts.

– Mixed VAT and Non-VAT operations: Input tax must be averaged. See VAT in Thailand.

Filing Requirements

1. P.N.D.50 Form:

– Components: Financial statements and relevant tax information.

– Deadline: Within 150 days from the end of the accounting period.

2. P.N.D.51 Form:

– Advance filing: Within 2 months from the last day of the accounting period.

Tax Rates for SMEs (as of 2018)

1. Exemptions and Rates:

– Tax Exemption: Up to 300,000 baht.

– Rates for different profit brackets:

– 15% for profits between 300,001 and 3,000,000 baht.

– 20% for profits exceeding 3,000,000 baht.

Stamp Duty Details

1. Specific Rates:

– Various rates based on the transaction amount and nature, e.g., borrowing money, guaranteeing contracts, etc.

Deadlines for Tax Payments

1. Corporate Income Tax Payments:

– Installment: First installment (1-15) by the 22nd of the month; second installment (16-end) by the 7th of the next month.

Summary

Pico Finance businesses in Thailand must adhere to stringent financial reporting and tax filing requirements. These include registering for and paying various taxes, preparing and submitting financial statements, and complying with specific tax rates and deadlines. The document emphasizes the importance of compliance to avoid penalties and ensure smooth business operations.