Know first! Reduce in time. Open 6 ways to make SMEs businesses pay less tax.

today Small and Medium Business or familiar in business names SMEs There are many pop up in Thailand. even managed by itself in the name”natural person” includes small and medium-sized businesses that are registered companies or are “legal entity“There are quite a few.

and no matter the size of the business What is the management format? would not escape the duty of all taxpayers Each year, there are SMEs entrepreneurs who have to pay a lot of tax, unfortunately. Therefore, plan to reduce SMEs business tax from the following channels

• What type of business is called SMEs?

SMEs is an English abbreviation for Small and Medium Enterprises, meaning small and medium businesses. Covering both medium and small business groups whether it is a natural person, a group of persons, a limited partnership or limited company

It is an independent business.costin low investment andemployeea small number of which operates 3 main types of businesses which are

1. Manufacturing business It is a business that takes raw materials to be processed into finished goods. by covering production in both the agricultural sector business like a mineral and production that uses existing raw materials to be processed into various products

2. Trade business It is a business that does not produce its own products. but the purchase of finished goods to sell will focus on selling only Or popularly known as buying and selling business. Consists of wholesale and retail businesses such as exercise equipment sales Finished goods business

3. Service business It is a business that primarily provides services or sells services. It does not sell products such as factory businesses, bookkeeping offices, beauty salons, restaurants and all service-related businesses.

• Taxes related to SMEs

Although SMEs are small businesses. But it still has the same tax obligations as large businesses. The tax burden for SMEs can be divided into two main forms:

1. SMEs who are “natural person“ Have a duty to pay personal income tax Which is classified as Category 8, assessable income under Section 40 (8) by means of personal income tax for SMEs, to bring all income throughout the year. minus expenses You can choose a chartered or actual deductible. (If the actual form is deducted, all documents and evidence of expenses must be kept) and deductibles. It is then used to calculate income tax at the progressive tax rate.

2. SMEs who are “legal entity“ have a duty to pay corporate income tax By calculating the tax from the net profit, SMEs with a net profit of not more than 300,000 baht will be exempt from tax. and can deduct expenses Expenses up to 2 times

• SMEs business tax reduction guidelines

1. Exemption and reduction of corporate income tax rates

Companies or juristic partnerships with paid-up registered capital on the last day of the accounting period not exceeding 5 million baht and having income from sales of goods and services not exceeding 30 million baht per year continuously since the beginning of the accounting period On or following 2012, tax exemption if the net profit does not exceed 300,000 baht, if more than that, tax will be reduced as follows:

• Net profit 1 – 300,000 baht, exempt from tax.
• Net profit 300,001 – 3,000,000 baht, tax rate 15%
• Net profit 3,000,001 baht or more, tax rate 20%

2. Employing the elderly, deducting income twice.

Company or juristic partnership thatEmployment of the elderly Able to deduct expenses up to 2 times the wages paid to employees. Elderly employees aged 60 years and over as actually paid but not exceeding the amount of 15,000 baht (paying 15,000 baht, deducting expenses 30,000 baht), with the following conditions:

• Hired elderly Must not exceed 10% of the total number of employees.
• When all the wages of the elderly are added together Must not exceed 10 percent of the total wage expenditure of that business.
• Must be an elderly person who is already an employee of the company or registered with the Department of Employment
• Must not be or used to be a director or shareholder of the hired company or affiliated companies
• Wages for the elderly only for those who pay not more than 15,000 baht per month
• If the elderly work in many places Let the company that accepts work before receiving the right

3. Less property depreciation, special rate

Company or juristic partnership with fixed assets (Building and equipment), excluding land, not exceeding 200 million baht, and employing not more than 200 people.

• Able to deduct wear and tear and depreciation of computer assets and computer equipment including computer programs for 40 percent of the cost value on the date of acquisition The remainder is gradually deducted within 3 accounting periods (33.33% per year) (computer program is copyright In the case of unlimited usage The number of years that wear and tear deductions must not be less than 10 accounting periods.)
• Able to deduct wear and tear and depreciation of factory building assets by 25% of the cost value on the date of acquisition The remainder is gradually deducted within 20 accounting periods (5 percent per year).
• Able to deduct wear and tear and depreciation of assets in type of machinery and equipment of machinery up to 40 percent of the cost value on the date of acquisition. The remainder is gradually deducted within 5 accounting periods (20 percent per year).

4. Purchasing, hiring, or costing for computer program services Double the tax deduction

Companies or juristic partnerships with paid-up registered capital on the last day of the accounting period not exceeding 5 million baht and having income from sales of goods and services in the accounting period not exceeding 30 million baht are entitled to income tax exemption for Income in the amount of 100% but not exceeding 100,000 baht for accounting periods beginning on or following January 1, 2021 but not later than December 31, 2022.

It is an expense that has been paid as a purchase price. or wages or service fees for computer programs from vendors, contractors, or computer program providers which has been registered by the Digital Economy Promotion Agency (DEPA).

5.Expenses for research and development of technology and innovation 2 times deductible

Companies or juristic partnerships can deduct expenses for research and development of technology and innovation 2 times, subject to the following conditions:

• Companies or juristic partnerships that wish to exercise the right The project must be submitted to the NSTDA for verification and certification.
• It is an expenditure for research and development of technology and innovation. to government or private agencies that have been announced

6.Training for skill development Double the expenses

Companies or juristic partnerships can deduct expenses for training and skill development by 2 times, subject to the following conditions:

6.1 In the case of sending employees to receive education or training

• Education expenses, such as tuition or training expenses, such as registration fees, including meals, accommodation, and travel expenses charged by the school or training facility by the company.
• have a receipt of an educational or training facility
• Set conditions for returning to work following completing studies/training
• prepare such expense report

6.2 In the case of training for their own employees

• It is a course created to develop the skill of employees. which has been certified by the Ministry of Labor and expenses are in accordance with the rates approved by the Ministry of Labor
• Must be for the benefit of the business
• Employee registration is required as proof of work.
• Set conditions for returning to work
• equipment to be used for training Characteristics, sizes and properties must be defined so that they do not mix with those used in the normal business operations of the Company.

And all of this is just a channel for some SMEs tax relief. As a guideline for tax planning for SMEs entrepreneurs have chosen the tax deduction channel that is most suitable for their business.

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Source : Inflow Accounting
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