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Please note that a company which has a fiscal year ended December 31 must file its financial statement with the Department of Business Development (“DBD”) within May 31 of each year. On January 6, 2012, the DBD issued the announcement in respect of rules and methods for filing financial statements B.E. 2555 which revised the previous form for filing financial statements (Sor.BorShor.3).

The updated form for filing financial statements can be downloaded at http://www.dbd.go.th/mainsite/fileadmin/downloads/08_fn/form_sbch3_web.pdf

Re: Personal income tax payers, companies, partnerships, juristic persons and payers of income who have the duty to withhold tax at the point of payment, shall have and use identification numbers in compliance with Revenue Code (No. 3)

The following notice shall be enforced and in effect from February 1, 2012 onwards.

1. In case of a person who has the duty to pay personal income tax, possesses and uses an identification number under the law governing citizen registration, he/she shall use the said identification number under the Revenue Code, without having to file an application for a tax identification number and tax payer identity card under the Director-General’s requirement.

2. In case of a company, a partnership, a juristic person, who has and uses a juristic person registration number which is issued by the Department of Business Development, the said juristic registration number shall be used in compliance with the Revenue Code, without having to file an application for a tax identification number and tax payer identity card, as per the Director-General’s requirement.

3. In the case where a payer of income is a trade association or a chamber of commerce, who has and uses a juristic person registration number which is issued by the Department of Business Development, the said juristic registration number shall be used in the case where the payer is a person who has the duty to withhold tax, without having to file an application for a tax identification number and tax payer identity card, as per the General-Director’s requirement.

Reduction of Rates of Contributions to Social Security Fund B.E. 2555 (2012)

According to the Ministerial Regulations for Fixing Rates of Contributions to Social Security Fund B.E. 2555 (2012) dated 6 January 2012 enforced as from 1 January 2012, it reduces the rates of contributions for employers and employees from 5% to be as follows:

1. For January 2012 – June 2012, employers and employees must pay 3% of wages for

- Contributions for payment of compensation benefits in case of injury, sickness, disability, death or child delivery which must be paid by each party for 0.5% of wages;

- Contributions for payment of compensation benefits in case of child welfare or old age which must be paid by each party for 2.0% of wages;

- Contributions for payment of compensation benefits in joblessness which must be paid at the previous rates by each party for 0.5% of wage.

2. For July 2012 – December 2012, employers and employees must pay 4% of wages for

- Contributions for payment of compensation benefits in case of injury, sickness, disability, death or child delivery which must be paid by each party for 0.5% of wages;

- Contributions for payment of compensation benefits in case of child welfare or old age which must be paid by each party for 3.0% of wages;

- Contributions for payment of compensation benefits in joblessness which must be paid at the previous rates by each party for 0.5% of wage.

As from January 2013, employers and employees must pay contributions to Social Security Fund at 5% as they have usually paid before the floods event.

The devastating floods in Thailand this year have adversely affected the lives of millions of people and thousands of companies doing business in Thailand. In the aftermath, every effort must be made to recover from the tragic losses that have been incurred. On the corporate front, a number of government agencies have mechanisms in place to aid in business recovery, as follows:

Businesses with BOI privileges that wish to move machinery and raw materials out of flood-affected areas or require other forms of assistance from the BOI can contact the BOI at the following numbers:
- Investment Promotion Bureau 1- Agriculture and Light Industry: 0-2553-8298;
Ms. Warisara Phungtonglor: 0-2553-8274; e-mail: warisara@boi.go.th

- Investment Promotion Bureau 2 – Metal Parts, Machinery, Vehicles: 0-2553-8366
Ms. Anin Meksuksai: 0-2553-8366; e-mail: anin@boi.go.th

- Investment Promotion Bureau 3 – Electronics and Electrical Goods: 0-2553-8167
Ms. Nuntanart Krisnachinda: 0-2553-8167; e-mail: nuntanart@boi.go.gh

- Investment Promotion Bureau 4 – Chemicals, Paper, Plastics, Utilities, Services: 0-2553-8294
Mr. Wuttichai Pisatphen: 0-2553-8294; e-mail: wuttichai@boi.go.th

The BOI has approved a number of measures to assist BOI-promoted companies in recovering from the floods, as follows:

Raw materials that have been imported prior to the floods for use in the production of goods designated for export, but have been damaged by the floods, can be written off as waste allowance and relieved of tax burdens. Raw materials that are still usable can be used in other on-going projects and still be entitled to benefits under Section 36.
Measures to facilitate companies in bringing in foreign nationals to effectively help with business recovery in Thailand.
Raw materials imported under section 36 (duty-free importation for export manufacturing) that are completely damaged shall be recognized as part of a company’s waste allowance and shall be relieved of tax burdens.
Companies are permitted to temporarily outsource all of their manufacturing processes to other manufacturers, to maintain continuity in delivering their products to customers.
An extension until 30 June 2012 of import tax exemption on machinery brought in to replace machinery damaged by flooding.

Note: The above measures are only designed to assist the business rehabilitation of BOI-promoted companies. In fact, however, the seriousness of the situation is such that the Government should consider granting such privileges to companies that have not received BOI promotional privileges.

As far back as June 2011, the RD introduced measures to relieve the tax burden of flood victims and to provide an incentive to individuals, partnerships and companies providing flood-relief donations, or donations in light of other natural disasters, as follows:
* Personal and corporate income tax exemptions to individuals or companies or partnerships, who are flood victims or other natural disaster victims from 1 January 2011, on the following income:
- compensation in the form of cash received from the government;
- donations in the form of cash or assets received from any entity, but not exceeding the value of the damages incurred.
The exemptions will be granted for the tax year or the accounting period in which the compensation or donations were received.
* Corporate income tax exemptions to any company and partnership in the amount of an insurance claim obtained from an insurance company which exceeds the net book value of the assets damaged for the accounting period in which the insurance claim is received.
* Individuals, companies and partnerships may deduct the value of donations made to assist flood victims, through companies, partnerships or other juristic persons acting as intermediaries in forwarding the donations to the flood victims.
* An individual can claim a personal income tax deduction for the actual amount donated in cash, but the deduction when combined with other donations for charity, public benefit and educational institutions which must not exceed 10% assessable income after all allowances and deductions.
* Any company or partnership can claim a deduction for actual donations, either in cash or assets, but the deduction when combined with other donations for charity, public benefits and for education or sport under Section 65 ter (3) of the Revenue Code must not exceed 2% of net profit.
* Value added tax (“VAT”) exemption is granted to business operators on donations of goods to assist flood victims or other natural disaster victims, through companies, partnerships or other juristic persons acting as intermediaries.
* It should also be noted that the RD currently permits the transfer of certain parts of businesses to each other as between public limited companies or limited companies, in order for businesses to benefit from certain tax and duty exemptions. The RD should be contacted for more information in this regard.
* On 3 November 2011 the RD also issued an announcement granting certain concessions to taxpayers affected by the floods, including extending the period for tax filing and payment deadlines. Details of the concessions can be obtained by contacting the relevant metropolitan and provincial offices of the RD.

Thousands of businesses have suffered massive losses as a result of the floods. One question that is frequently asked is whether or not companies whose assets have been partially destroyed can write off the entire residual value of whatever assets are left, and treat such as a deductible expense in their corporate income tax computations.

Where companies have insurance and they are in the process of claiming compensation from their insurance company, they will not be permitted to immediately treat their losses as a deductible expense in their corporate income tax computations, pursuant to Section 65 ter (12) of the Thai Revenue Code. They will, rather, only be entitled to a deduction on such losses in the year that they receive compensation from their insurance company.

In contrast, where companies do not have insurance, they will be permitted to treat the total residual value of their losses as a deductible expense in the year that the losses occur. However, they must have sufficiently reliable records with which to prove their losses. For example, they should report their losses to the police; they should have details of assets that are lost or damaged on their list of inventory and assets; etc.).

Section 75 of the Thai Labour Protection Act of 1998 states that:
“Where it is necessary for an employer to temporarily halt its operations wholly or partially for any significant cause which affects the business operations of the employer, in such a way that it is unable to carry on business as usual, and that cause is not a force majeure, the employer shall pay its employees at least 75 per cent of the normal basic pay on a working day that the employees were receiving prior to the cessation of operation and shall continue to so pay for the entire period during which the employer does not require the employees to work.
The employer shall give not less than three working days’ advance notice in writing to its employees and a labour inspector prior to halting operations as referred to in the previous paragraph.”
By reverse application of Section 75, companies whose business operations have been halted by the floods might claim that the interruption of the businesses was due to force majeure, i.e., an unavoidable event that resulted from the forces of nature – namely, the floods. If a court of law were to hold in favour of such companies, such companies would not be required to compensate their employees.
In practice, however, given the severity of the circumstances experienced by employees as a result of the floods in Thailand, a majority of companies will in fact pay their employees at least 75% of their normal basic pay. The reason for doing so is not only in order to mitigate the hardships that are suffered by their employees; it is also to avoid coming into conflict with the Thai Ministry of Labour regarding the issue of whether or not the business interruption suffered by the Companies could legally be regarded as being due to force majeure or not.
Therefore, if any company wishes to pay 100% of their salaries to employees who return to work, and 75% of their salaries to employees who do not return to work, it can do so by means of an Announcement or a Notification posted at the company offices, as well as informing labour inspectors not less than 3 working days prior to implementation of the two-tiered payment plan.

Royal Decree No. 527 was issued to relieve the tax burden of flood victims and to provide an incentive to donors due to the floods or other natural disasters. The Royal Decree No. 527 stipulated as detailed below:

Clause 3. Exemption of personal and corporate income tax is granted to individuals or companies or partnerships, who are flood victims or other natural disaster victims from 1 January 2011, on the following income:

The exemption will be granted for the tax year or the accounting period which the compensation or donations were received.

Clause 4. Corporate income tax exemption is granted to any company and partnership in the amount of an insurance claim obtained from an insurance company, which exceeds the net book value of the assets damaged for the accounting period in which the insurance claim is received.

Clause 5. Individuals, companies and partnerships may deduct the value of donations made to assist flood victims, through companies, partnerships or other juristic persons action as intermediaries in forwarding the donations to the flood victims.

An individual can claim a personal income tax deduction for the actual amount donated in cash, but the deduction when combined with other donations for charity, public benefit and educational institutions which must not exceed 10% assessable income after all allowances and deductions.

Any company or partnership can claim a deduction for the actual donations, either in cash or assets, but the deduction when combined with other donations for charity, public benefits and for education or sport under Section 65 Tri (3) of the Revenue Code must not exceed 2% of net profit.

Clause 6. Value added tax (“VAT”) exemption is granted to business operators on donations of goods to assist flood victims or other natural disaster victims, through companies, partnerships or other juristic persons acting as intermediaries.

Remark The reason that the Thai Revenue Department (“RD”) issued Royal Decree No. 527 is to provide an income tax exemption for victims of natural disasters on compensation received from the Thai government or donations received from other sources. In addition, donations of cash, goods or assets via the intermediaries under this Royal Decree is another way in which the RD allows an individual or a corporate entity to deduct the allowance/expense and to obtain VAT exemption as well.

This Royal Decree shall be enforced and effective after the publication dated (9 June 2011) in the Government Gazette onwards.

Notification of the Ministry of Finance
Re: Rules and Procedures Respecting Registration
of Thai Consultants B.E. 2554 (A.D. 2011)

The notification was issued and became effective on 1 October 2011. The Ministry of Finance issued the notification in accordance with the establishment of the Thai Consultant Database Center and for clarity of rules and procedures respecting registration of renewal and revocation of Thai Consultants.

The Thai Consultant Database Center was established for gathering database of Thai consultants and the details of which can be found by those interested persons who wish to consider and choose a consultant.

There are 2 types of Thai Consultants:
1) Independent Consultants
2) Juristic Person Consultants

There are 15 sectors for registration as Thai Consultants as follows:
1. Agriculture and Rural Development
2. Construction Industry Development
3. Education
4. Energy
5. Environment
6. Finance
7. Health
8. Industry
9. Population
10. Telecommunications
11. Tourism
12. Transportation
13. Urban Development
14. Water Supply and Sanitation
15. Miscellaneous (including legal matters)

Notice of wage Committee
Re: Rates of Wages According to skills Standards ( No.2 )

Whereas the Wage Committee had held a meeting to study and consider the facts concerning the rates of wages the employees have received according to their skills standard and passed a resolution on April 18, 2011 fixing the rates of wages according to their skill standards totaling 11 occupational fields, using the national labour skill standards under the law governing promotion and development of labour skills as the basis on measurement of skill, knowledge, and ability.

By virtue of Section 79(4) and Section 88 of the labour Protection Act B.E.2541 (1998), amendment by the labour Protection Act (No.3) B.E. 2554 (2008), the wage committee hereby issued the rate fixing of wages according to skill standards of the above notices.

The employer who has received a certificate stating that the employee has passed the test of the skill standards occupation fields and levels mentioned above, the employer shall pay wages according to the rates fixed by this notice to the employee as from the date of receipt of such a certificate.

The above notice shall be enforced after the lapse of 90 days from the date of its publication in the Government Gazeatte.

http://www.apsthailand.com/อัตราค่าจ้างตามระดับมาตรฐานฝีมือแรงงาน.html

Re: Notification of the Director-General of the Revenue Department No.181 – New VAT regulation has been issued to amend the rules and conditions of a service in Thailand and has been used in a foreign country which is subject to 0% VAT

The Notification No 181 was issued and became effective on 29 March 2011 to amend Clause 2 (1) of the Notification of the Director-General of the RD on VAT No 105 (Notification No 105), which is related to the rules and conditions regarding a service which is rendered in Thailand and used in a foreign country.

The New regulation of Notification No.181 stipulated that the provision of services in Thailand to the recipient of services in a foreign country, resulting in the services being used in a foreign country.

In the case of providing services under the first paragraph and part of the services is used in Thailand, a registrant shall be liable to impose VAT at the rate of 0% pursuant to Section 80/1 of the Revenue Code, specifically VAT is levied on the part of the services that is used in a foreign country.

The provision of services under the above paragraph means any activity, not being a sale of goods, which is performed to seek a valuable benefit, but not including tour services in a foreign country.

Clause 1. The services which are provided in Thailand and used abroad would be subject to 0% VAT according to Section 80/1(2) of the Revenue Code.
Clause 2. Under the new regulation, services performed in Thailand and used abroad would be subject to 0% VAT, but it is not necessary that such services be entirely used abroad, under the old regulation. Notification No.105 the services performed in Thailand can be used both in Thailand and abroad. In this regard, the New regulation of Notification identified that the portion of services which is used abroad would be subject to 0% VAT while the portion which is used in Thailand would be subject to 7% VAT.

This Notification shall be enforced and effective on and from the date of its publication ( The 29th day of March 2011 on wards )

As a result of the announcement of the Ministerial Regulation re: an application for a permit, issuance of a permit and notice of foreigners’ working dated June 13, 2011, the Department of Employment (the “DoE”) then requires a medical certificate in support of an application for renewal of a work permit. Prior to making the announcement of the Ministerial Regulation, the DoE required a medical certificate only in the case of a new work permit application.

Please note that a medical certificate must be issued, not more than 6 months prior to the date of filing an application, by a medical practitioner under the law on medical treatment professionals. A medical certificate must state that an applicant is not a person of unsound mind or suffering from mental infirmity and is free from Leprosy, Tuberculosis, Drug Addiction, Alcoholism, Elephantitus and Tertiary Syphilis.

Ministerial Regulation
An application for a permit, issuance of a permit and notice of foreigners’ working

By virtue of the provisions of Section 6, Section 9 Paragraph Three, Section 11 Paragraph Two, Section 13 Paragraph Three, Section 14 Paragraph Three, Section 23 Paragraph Four, Section 25 Paragraph Two and Section 26 Paragraph Three of Foreigners’ working Act B.E. 2551 (A.D. 2008), which is a law comprising certain provisions relating to the restrictions of personal rights and freedom, for which Section 29 incorporating Sections 32, 33, 35 and 43 of the Constitution of the Kingdom of Thailand, by virtue of the provisions of law, the Minister of Labour hereby issues this Ministerial Regulation which contains 37 Clauses, 13 pages.

Remark: The reason to announce and issue this Ministerial Regulation, whereby Sections 9 Paragraph Three, Section 11 Paragraph Two, Section 13 Paragraph Thee, Section 14 Paragraph Three, Section 23 Paragraph Four, Section 25 Paragraph Two, and Section 26 Paragraph Three of Foreigners’ working Act B.E. 2551 (A.D. 2008) provision to its work permits, the application and issuance of a permit, the application and extension of a permit, the application and issuance of a substitute work permit including permission to change or add a category or nature of work, an employer, a locality, a place of work or conditions, for any foreigner who wishes to engage in the work operation in the Kingdom, as well as notification of foreigners entering the Kingdom for temporary and urgent work permits, shall be in accordance with the form, criteria and procedures as prescribed in the Ministerial Regulation, therefore, it is essential that this Act be enacted.

A ministerial regulation was issued to prescribe that a number of disabled persons must be employed by an employer, be it a business owner or a government agency. On 26 April 2011, the regulation also fixed an amount of money that must be remitted to the following Fund if the employer failed to employ disabled individuals.

Employers who have 100 employees or more are required to employ disabled persons at a ratio of 1 disabled person per 100 employees. In the event of a fraction of 100 employees, if exceeding fifty, one more disabled person should be employed. For example, if a company has 251 employees, three (3) disabled persons should be employed. A head count will be done on a yearly basis on every October 1st to ensure their compliance with this regulation.

Those employers who do not comply with this regulation will have to remit contributions annually to the Fund for Empowerment of Persons with Disability. The contributions will be made in cash or by cheque at the minimum wage rate at that time and multiplied by 365 days and then multiplied by the total number of disabled persons the company should be employing. In addition, the contributions will be payable by the 31st January of each year.

This regulation shall be enforced and effective as from 180 days after the publication date (29 April 2011) in the Government Gazette.

Submission of Financial Statements for the year ended December 31, 2010 and list of shareholders

For a company which has a fiscal year ended December 31, 2010, it must hold an Annual General Meeting (“AGM”) to consider and approve its balance sheets within 4 months after the fiscal year-end or within April 30, 2011.

The company must submit to the Department of Business Development its financial statements for December 31, 2010 and list of shareholders who are the shareholder as of the AGM date within one month from the AGM date. Therefore, if the company holds AGM on April 29, 2011, it must submit the financial statements within Monday May 30, 2011; or if the company holds AGM on April 30, 2011, it must submit the financial statements within Tuesday, May 31, 2011.

The Department of Business Development, Ministry of Commerce, issued the announcement of a new Regulation on January 4, 2011 called

“Regulation of
The Office of the Central Company and Partnerships Registry
Concerning the Registration of Partnerships and Companies, 2011”

The Regulation took effect on March 1, 2011, and was also announced as a replacement of the following regulations:

All Orders, Announcements and other regulations, to the extent that they violate or contradict the provisions hereof, are replaced by this Regulation.

Re: Payment of an Annual Fee under Factory Act B.E. 2535 (1992)
In case of notification by a written request for a temporary cessation of factory operation, or in case of having been ordered to stop an entire factory operation for one year or more, or having been ordered to close down a factory, before an expiration date of an annual fee payment for operation commencement date in the following year

For the purpose of practical guidelines, clarity of law, and fairness to operators of factory business concerning payment of an annual fee under Section 43 of the Factory Act B.E. 2535 (1992) in case of the operators of factory business of Categories 2 and 3 which submit letters requesting a temporary cessation of its operation, or which are ordered by the competent authorities to stop their operations for a period of one year or more, or which are ordered to close down their factories before the expiration date of an annual fee payment for operation commencement date in the following year, the Minister of Industry therefore issues this Notification concerning payment of an annual fee as follows:

No. 1. The operators of factory business of Categories 2 and 3 are not required to pay an annual fee as follows:

1.1 An operator of a factory business who submits a letter requesting cessation of a factory business for one year or more before the expiration date of an annual fee payment for operation commencement date in the following year (Date of annual fee payment).

1.2 The competent authority has ordered that the entire factory business operation be stopped for a period of one year or more before the expiration date of an annual fee payment for operation commencement date in the following year (Date of annual fee payment).

1.3 The competent authority has ordered that the factory be closed down before the expiration date of an annual fee payment for operation commencement date in the following year (Date of annual fee payment).

No. 2. If it appears that any factory business operator still operates its business during the periods under No. 1, the factory operator must pay an annual fee together with a surcharge of five percent (5%) per month retroactively from the expiration date of an annual fee payment.

The Labour Act was announced in the Government Government Gazett on 17 January 2011 and shall be enforced after the lapse of one hundred and eighty days from 17 January 2011. The reasons in enacting the Labour Act is because the Safety, Occupational Health and Environments in Work Performance Act B.E. 2554 (A.D. 2011) (the “Safety Act”) was also announced in the Government Gazette on 17 January 2011 and shall be enforced after the lapse of one hundred and eighty days from 17 January 2011, to prescribe the control, supervision and management in respect of safety, occupational health and environments in work performance as a specific matter.

Therefore, the Labour Act shall amend the Labour Protection Act B.E. 2541 (A.D.1998) in order to repeal the provisions of Chapter 8, Safety, Occupational Health and Environments in Work Performance, Sections 100 – 107, 154 and 155 and shall repeal the wording related to Sections 100 – 107 which were specified under Sections 144, 146, 148 and 151 in order to comply with the Safety Act.