Taxation and Accounting in Thailand

Introduction to the New Accounts Act

   Formerly anyone with some experience could be a bookkeeper to handle company accounts and submit the annual financial statement to the Commercial Registration Department (CRD). They did not have to take responsibility for them, as a company director had to sign approval.

   Under the New Accounts Act, every company must appoint a suitably qualified bookkeeper to be responsible for company accounts and submitting the annual financial statement, which they must sign.

   In Section 7 Item 6, the department's Director-General can issue an announcement outlining the qualifications and conditions of being a bookkeeper. The announcement has already been issued, which says they must:

               I.   Be resident in Thailand
               II.  Be proficient in Thai language
               III. Have no prior criminal conviction
               IV. Have recognized academic qualifications - a bachelor's degree in 
                    accounting for larger business (Group 4), or vocational certificate or
                    diploma for small businesses. Small businesses (Group 3) are described
                    as having capital not exceeding 5 million baht, total revenue not more
                    than 30 million baht and total assets not more than 30 million baht

   Registered partnerships and limited companies come under Group 3 or Group 4 headings depending on size (see iv above). For Group 3, any one item exceeding the maximum moves the entity into Group 4.

   A public limited company, foreign juristic person conducting business in Thailand, joint venture, financial institution, life assurance entity, or business that is promoted by BOI all require bookkeepers with bachelor's degrees.

   Qualified bookkeepers must register their qualifications within 60 days from 10 August 2000, as there is a one-year transition period. From 10 August 2001, every bookkeeper must be qualified.

   All qualified bookkeepers have to attend an accounting course every 3 years to upgrade their professional education. One bookkeeper may do accounts for 100 clients. If their client list exceeds 100, they need an assistant with the same qualification.

   So who can be a bookkeeper? It can be a company employee, such as the controller or treasurer. Or you can outsource the bookkeeping to an auditing or accounting firm. Every entity must have one bookkeeper to submit the annual financial statement.

   Unqualified bookkeepers with 5 years experience must notify the CRD within 60 days of 10 August 2000. They will be required to take a 60-hour accounting course between January and May 2001 at any university offering accounting courses. There will be three fixed periods to choose from, with a 90% attendance required. Courses will cost 6,000 baht. After that they have to pass an examination with a minimum score of 60%.

   Anyone not passing the first test must take it again. Those that do not pass cannot be bookkeepers.

   Those who pass the examination can be bookkeepers for only 8 years. They will have until 9 August 2008 to become suitably qualified.

   Under Section 19 the person responsible for accounts has to supervise the bookkeeper to prepare accurate accounts.

   Section 12 requires the bookkeeper to do a good job in accordance with standard accounting procedures and the person responsible for the accounts to provide the proper documents.

   Besides keeping accurate accounts, bookkeepers have to make all entries in the Thai language, translating foreign entries into Thai.

   Under Section11 item 4, registered partnership may be exempt from audit provided they have a CRD announcement of exemption. Usually juristic persons are required to have an auditor. But because there are a lot of registered partnership, mostly family business, they may apply for exemption. However, the Revenue Department will probably insist on a tax auditor looking at the books instead. 

   In Section 14, the time to keep accounts records has been reduced from 10 years to 5 years. However, if applying for tax refunds, entities will still have to keep records for 10 years, because that law is different.

   The new law mainly deals with accounting standards to make company accounts more transparent. Anyone responsible for the accounting must have the appropriate knowledge, meaning they must be properly qualified.

Penalties

   Chapter 5, Sections 27 to 41 outline penalties. 

   Who should be penalized" First the person having the duty to keep accounts, second the bookkeeper, third whoever does something wrong.

   The maximum prison term is 10 years, minimum one month. And maximum fine is 60,000 baht. Minimum 2,000 baht.

   An important point is that this law gives authority to the Director-General to fine people. The case does not need to go to the court or the police, as under the previous law. This will make everything faster.

   Under Section 40, if the offender liable to punishment is a juristic person, the managing director or partner or representative of any person responsible for the operation of that juristic person will also be punished. The law recognizes that a juristic person cannot do anything by itself.

   In Section 37 whoever discloses information about the accounts will be punished by prison not exceeding 6 months and fine not exceeding 10,000 baht. Officials receive double the penalty.

   In Section 38 if anyone damages, destroys, conceals or loses the accounting documents, they will be punished by person not exceeding one year and fine not exceeding 20,000 baht.

   In Section 39 any person entering false records, altering or omitting accounts is liable to prison not exceeding 2 years and a fine not exceeding 40,000 baht. If the offender under both sections is the person responsible to keep accounts, the penalty is doubled.

   Accountants should be careful also. Under Section 35, any person not complying with accounting standards can be punished by a fine not exceeding 5,000 baht for each case.

   If their error is the result of a management order, they must have documentary evidence of their protest, which can be used, in court.

   In Section 16, if inspections find those accounts are damaged or missing, they can assume it is intentional unless the accused can prove it is not.

   When inspectors invite bookkeepers to answer questions request the account books, of ten they claim they did not receive a letter. Section 24 says the chief inspector must send a letter can be delivered to anyone over 20 years old or affixed to the door, meaning that the order has been properly received.

Click here to download the Document for  Deduction of Tax at Source

Click here to download the Document for   Ministerial Regulation

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