Tax Services

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International Tax, Transfer Pricing, and
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International tax planning
Cross-Border Transaction Services
Transfer Pricing Services
General Tax Services
Private Tax

Tax Services for International and Domestic Companies in Thailand

Kreston Thailand offers a variety of tax services to both international and domestic companies. We break down the services we offer.

 

In the globalized economy, understanding international tax laws, treaties, transfer pricing, and compliance is essential. International tax planning holds significant importance for businesses operating across borders. Failure to comply can result in penalties and legal repercussions. By navigating this complex landscape, businesses can optimize tax efficiency, prevent disputes, and foster sustainable growth.

Outbound tax planning

  • Structuring foreign operations: This involves advising on the most tax-efficient way to set up subsidiaries, branches, and other entities in foreign countries. This may include considering factors such as the tax treaties between countries, the types of activities being conducted, and the tax rates in different jurisdictions.
  • Tax compliance: This includes preparing and filing tax returns for foreign subsidiaries, branches, and permanent establishments, as well as withholding tax returns for payments to foreign residents.
  • Transfer pricing strategies: As mentioned before, transfer pricing is setting prices for transactions between related companies. International tax planning helps ensure these prices are set in a way that complies with regulations and minimizes overall tax exposure.
  • Tax treaty utilization: Tax treaties are agreements between countries that aim to avoid double taxation and ensure fair tax treatment for businesses operating in both countries. International tax planners can help businesses understand and utilize the benefits of relevant tax treaties.
  • Tax incentives and credits: Many countries offer tax incentives and credits to attract foreign investment. International tax advisors can help businesses identify and qualify for these benefits.
  • Repatriation planning: This involves structuring the repatriation of profits from foreign subsidiaries to the parent company in a tax-efficient manner.

Inbound tax planning

  • Entity Selection and Incorporation: Advising on the most appropriate legal entity structure for your business operations in Thailand, considering factors like tax implications, ownership requirements, and operational flexibility.
  • Subsidiary vs. Branch Office: Guiding clients on the tax advantages and disadvantages of establishing a subsidiary company compared to a branch office in Thailand.
  • Holding Company Structures: Exploring the potential benefits of using a holding company structure to optimize tax efficiency for international businesses with operations in Thailand and other countries.
  • Tax Treaties and Incentives: Helping clients leverage Thailand’s DTAs and tax incentive programs (like those offered in SEZs) to minimize their overall tax burden.
  • Permanent Establishment (PE) Analysis: Determining whether a foreign company’s activities in Thailand constitute a PE, which could trigger tax filing obligations.
  • Corporate Income Tax (CIT): This remains the main tax on profits earned by companies registered in Thailand (20%).
  • Branch Profit Tax (BPT): This tax applies to net profits of a foreign company’s branch office in Thailand (also 20%).
  • Special Economic Zones (SEZs): These offer tax incentives like reduced CIT rates, import duty exemptions, and simplified procedures for businesses operating within them.

Cross-border transactions, the cornerstone of international trade, present a fascinating paradox when it comes to taxes. They fuel global economic growth and innovation, yet introduce complexities that can turn a profitable venture sour if not managed strategically. Let’s delve deeper into this concept, exploring both the advantages and the tax considerations that come with cross-border transactions.

Tax Considerations for Cross-Border Transactions

  • Double Taxation: One major concern is the potential for double taxation. This occurs when a single income stream is taxed by both the country where it originates and the country where it’s received. Tax treaties and transfer pricing rules are established to mitigate this issue.
  • Transfer Pricing: As mentioned before, transfer pricing refers to the pricing of transactions between related parties in different countries. Tax authorities scrutinize transfer pricing to ensure these transactions are conducted at arm’s length, meaning the prices are similar to what unrelated parties would charge each other.
  • Indirect Taxes: Cross-border transactions may also be subject to indirect taxes like VAT (Value Added Tax) or GST (Goods and Services Tax). Understanding these regulations and ensuring proper collection and remittance of these taxes is crucial.
  • Withholding Tax on Cross-Border Payments: Ensuring clients understand and comply with withholding tax requirements on payments like royalties, dividends, and interest made to non-residents.
  • Compliance Complexity: Navigating the tax implications of cross-border transactions can be complex. Businesses need to comply with the tax laws of multiple jurisdictions, which can involve different filing requirements, reporting deadlines, and tax rates.
  • Import and Export Duties: Advising on the various import and export duties applicable to specific goods being traded across Thai borders.

Transfer pricing deals with the setting of prices for transactions between related parties within a multinational enterprise (MNE). These parties could be subsidiaries, parent companies, or affiliates under the same control. Transfer pricing services encompass a range of activities that ensure these transactions comply with tax regulations and optimize the overall tax position of the MNE. Here’s a breakdown of some key services offered under transfer pricing.

Transfer Pricing Policy Development

  • Assisting companies in developing and/or optimizing transfer pricing methodologies for transactions with related parties in different countries.  This helps ensure compliance with Thai transfer pricing regulations and minimizes the risk of tax adjustments.
  • Performing analysis and modelling of intercompany services charges.

Transfer Pricing Documentation

  • Assisting companies in preparation and/or review with transfer pricing documentation to ensure compliance with Thai regulations.
  • Performing benchmarking searches.

Transfer Pricing Audits

Representing clients during transfer pricing audits conducted by the Thai Revenue Department.

Tax services encompass a broad range of professional services that assist businesses in navigating the complexities of tax laws and regulations. Here’s a breakdown of some common categories offered under general tax services.

Tax Compliance

Ensuring companies comply with all Thai tax laws and regulations for filing returns, paying taxes, and maintaining proper accounting records.

Value Added Tax (VAT)

Standard VAT rate is 7%, with exemptions and lower rates for specific goods and services.

Withholding Tax

Understanding and complying with withholding tax requirements for domestic transactions.

Tax Audits

Representing businesses during tax audits by the Thai Revenue Department.

Payroll tax services

This includes managing payroll taxes for businesses, ensuring proper withholding and remittance of taxes like social security and income tax.

Personal tax services encompass a variety of professional services designed to help individuals navigate the often-complex world of personal income taxes. Here’s a breakdown of some common services offered.

Personal Income Tax (PIT)

Tax professionals assist in preparing and filing annual tax returns. They ensure accurate reporting of income, deductions, and credits. Progressive tax rates apply (0% to 35%).

Our Services

Accountancy Services

Business processing, CFO advisory, and, TRFS convergence.

Advisory Services

Business strategy, growth consulting, and regulatory insights.

Audit Services

Statutory audits, internal controls, and risk management.

Tax Services

Strategic planning, compliance, and transfer pricing.

Transaction Services

Due diligence, negotiations, and merger & acquisition guidance.