Procurement News Notice |
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| PNN | 8135 |
| Work Detail | Transforming from owner-operated small and medium-sized enterprises (SMEs) to juristic persons will help operators save 40-50% on their income tax bill, says the head of the Revenue Department. This is because of a lower corporate income tax rate and higher deductible expenses, said Prasong Poontaneat, the department's director-general. Juristic entities are liable for a lower tax bill than individual taxpayers such as SMEs, when the operators do not understate their tax payment, said Mr Prasong. The country's largest tax-collecting agency is encouraging drugstore and gold shop owners to register as juristic persons to enter the formal tax system. The move is part of the Finance Ministry's effort to boost tax income streams as the government kick-starts many big-ticket infrastructure projects and the retirement safety net expenses for people increases substantially. To draw owner-operated SMEs to register as juristic persons, the cabinet recently approved tax incentives including allowing juristic entities with registered capital not exceeding 5 million baht and annual sales of no more than 30 million to deduct expenses incurred from juristic person registration, accounting and auditing fees twice. In addition, transfer fees have been cut to 0.01% from 2% of appraisal value for property and condominiums. Even though individual taxpayers can deduct 60% of assessable income as expenses, juristic persons can deduct real expenses and there are larger tax-deductible items such as employee payrolls, travel expenses and depreciation, said Mr Prasong. Corporate income is also taxed at 20% of net profit, while individual taxpayers are subject to the top rate of 35%. According to the Federation for the Development of Accrediting Pharmacy, there are 21,300 drugstores nationwide, of which 90% are owner-operated shops and the rest chain stores. Revenue Department data showed that pharmaceutical sales amount to 100 billion baht a year. Apart from drugstores, the Revenue Department recently held talks with the Gold Traders Association to encourage around 7,000 gold shops to register as juristic entities and 5-10% of them have already done so. |
| Country | Thailand , South Eastern Asia |
| Industry | Financial Services |
| Entry Date | 15 Oct 2016 |
| Source | http://www.bangkokpost.com/business/news/1080876/gold-shops-drugstores-targeted-for-tax |
