Businesses that operate in Thailand might be subject to a type of tax called “specific business tax,” which is levied on certain categories of businesses. Any company that is required to pay specific business tax should study the information carefully in order to be able to calculate and submit tax payments within the specified time, and to follow correct tax laws and rates.

This article will introduce you to specific business taxes in Thailand, including tax rates, types of businesses subject to specific business tax, and how to calculate it. We’ll also discuss Stripe Tax, a tax solution that can help streamline filing for smooth and timely tax management.

What’s in this article?

• Get to know specific business tax in Thailand
  
• What types of businesses are required to pay specific business tax?
  
• Specific business tax rates
  
• How to calculate specific business tax
  
• How to file specific business taxes in Thailand
  
• How Stripe Tax can help
  

Get to know specific business tax in Thailand

Specific business tax is a type of tax levied on businesses that have certain characteristics prescribed by Thai law. It aims to manage and control businesses that might have an impact on the economy and society or that are in high-risk industries as defined in the Specific Business Tax Act B.E. 2551, such as businesses related to real estate sales, finance (loans or deposits), and some types of brokerage or dealer businesses.

Specific business tax is a source of revenue for the government and is a separate tax from value-added tax (VAT). Businesses that are subject to this tax will be taxed at different rates depending on the type of business and nature of operations. Specific business tax is collected on the income generated from the business each year, which is calculated from gross receipts before expenses, not from net profit like income tax.

What types of businesses are required to pay specific business tax?

The following types of businesses are required to pay specific business tax in Thailand:

• Commercial banking: Businesses that provide financial services and must be licensed by the Ministry of Finance and the Bank of Thailand.
  
• Finance, securities, and credit financier businesses: Financial institutions under the supervision of the Bank of Thailand that provide financial services similar to commercial banks, but that have a more limited scope of operations.
  
• Life insurance: Businesses that pay life and health benefits to the insured according to the terms and conditions of their policy, such as death, disability, or illness.
  
• Pawn broking: Businesses that provide loans by accepting valuable assets such as gold, jewelry, or electrical appliances as collateral. When the loan term is up, the pawnbroker must be repaid the principal and interest in order for the asset to be returned. If the repayment cannot be completed, the item used as collateral will become the property of the pawnbroker.
  
• Factoring: Third-party companies that provide an advance of working capital to businesses by purchasing their unpaid invoices. Businesses can then apply the advances toward enhancing liquidity or expansion.
  
• Businesses with banking activities: Businesses that carry out activities such as providing guaranteed loans, exchanging currency, dealing in bills of exchange (issuing, buying, or selling), or sending money abroad through various methods.
  
• Real estate: Businesses with real estate sales that are considered commercial or profitable activities according to the terms and conditions of the Royal Decree (No. 342) B.E. 2541.
  

Specific business tax rates

Specific business tax rates in Thailand vary depending on the type of business as follows:

Information from the Revenue Department
Note: The tax rate for real estate transactions should be reduced and maintained at a rate of 0.1% for the registration of rights and legal acts conducted within 1 year.

Specific business tax rates in Thailand change according to government policies released each year, so it’s important to regularly check the tax rates applicable to your business.

How to calculate specific business tax

Domestic specific business tax can be calculated using the following formula:

Specific Business Tax = Sales Price or Total Revenue × Tax Rate by Business Type

• Sales price or total revenue: Calculate your business’s income from the tax base according to the type of business and the nature of the income.
  
• Tax rate by business type: Use the specific business tax rates table to determine the tax rate for your type of business.
  
• How to calculate the amount of tax to be paid: Multiply the sales price or total revenue by the relevant tax rate.
  

Examples of calculating specific business tax

• Financial business (e.g., loan business, financial services): There is a specific business tax rate of 3% on interest or fees. Suppose a company lends ฿1,000,000 and charges interest at 10%. This results in ฿100,000 in interest. The specific business tax on that would be:
  

Specific Business Tax = Sales Price or Total Revenue × Tax Rate by Business Type
฿100,000 × 0.03 = ฿3,000

• Real estate brokerage business: There’s a specific business tax rate of 3% of the fee or compensation. Assuming a real estate agent receives a commission of ฿200,000, the specific business tax on that would be:
  

Specific Business Tax = Sales Price or Total Revenue × Tax Rate by Business Type
฿200,000 × 0.03 = ฿6,000

In addition to specific business tax, businesses are required to pay a local tax of 10% of the specific business tax amount. In some cases, specific business tax can be recorded as a business expense to reduce net profit if it is properly recorded and reported.

How to file specific business taxes in Thailand

Entrepreneurs who are eligible must submit an application for specific business tax registration within 30 days from the date of business commencement, with the following steps:

Register for specific business tax

Prepare supporting documents:

• Copy of ID card or passport
  
• Copy of house registration
  
• Business premises lease agreement and brief map
  
• Certificate of legal entity registration (if any)
  
• Report showing income before expenses, prepared daily and summarized at the end of each month (divide the report by each business location if there is more than one business location)
  

Apply for registration for specific business tax:

• Submit 3 copies of Form Por.Thor.01 and all supporting documents, complete and correct, within 30 days from the date of commencement of business.
  

Display registration certificate:

• Once you obtain a specific business tax registration certificate (Phor.Th.20), it must be displayed in an easily visible area of the business.
  

Reports and supporting documents should be kept for at least five years from the date a tax return was filed or a report was prepared.

Submit a specific business tax return

Submit form Phor.Th.40 and include:

• Type of business
  
• Amount of income
  
• Amount of specific business tax
  
• Local taxes (10% of specific business tax amount)
  

A specific business tax return must be filed monthly (even if there is no income in that month) by the 15th of the following month. It can be filed at the district revenue office or through the Revenue Department website (in the case of online filing and tax payment, the deadline can be extended for another eight days).

If the specific business tax in any month is less than ฿100, the business operator does not have to pay specific business tax in that month.

How Stripe Tax can help

Stripe Tax reduces the complexity of tax compliance so you can focus on growing your business. Stripe Tax helps you monitor your obligations and alerts you when you exceed a sales tax registration threshold based on your Stripe transactions. In addition, it automatically calculates and collects sales tax, VAT, and goods and sales tax (GST) on both physical and digital goods and services—in all US states and in more than 100 countries.

Start collecting taxes globally by adding a single line of code to your existing integration, clicking a button in the Dashboard, or using our powerful API.

Stripe Tax can help you:

• Understand where to register and collect taxes: See where you need to collect taxes based on your Stripe transactions. After you register, switch on tax collection in a new state or country in seconds. You can start collecting taxes by adding one line of code to your existing Stripe integration, or add tax collection with the click of a button in the Stripe Dashboard.

• Register to pay tax: If your business is in the US, let Stripe manage your tax registrations, and benefit from a simplified process that prefills application details—saving you time and simplifying compliance with local regulations. If you’re located outside the US, Stripe partners with Taxually to help you register with local tax authorities.

• Automatically collect tax: Stripe Tax calculates and collects the right amount of tax owed, no matter what or where you sell. It supports hundreds of products and services and is up-to-date on tax rules and rate changes.

• Simplify filing: Stripe Tax seamlessly integrates with filing partners, so your global filings are accurate and timely. Let our partners manage your filings so you can focus on growing your business.

Learn more about Stripe Tax, or get started today.