A guide of financial statements 2021 – 2022 for companies in Thailand.
- All Thai companies, partnerships, joint ventures, and foreign company branches must submit financial statements to the Ministry of Commerce for their assigned accounting period.
- Thailand’s tax system is self-assessment, with the fiscal year commonly defined as the 12-month period ending on December 31 every year.
- Financial statements for foreign companies must be submitted within 150 days of the fiscal year’s end. Once an accounting period has been selected, it cannot be changed without written permission from the Revenue Department.
- An independent certified auditor must examine and certify all financial statements.
- All foreign companies, joint ventures, partnerships, and branches must prepare financial statements for their assigned accounting period as assigned by the Thai Ministry of Commerce.
- The following legal frameworks outline the current audit and compliance regulations ;
– The Accounting Act of 2000.
– The Securities and Exchange Act of 1992.
– The Bank of Thailand Act B.E. 2485.
– Insurance Commission Act B.E. 2550.
– Financial Institutions Business Act B.E. 2551.
Annual General Meetings (AGM)
Companies and businesses operating in Thailand are required by Thailand’s Civil and Commercial Code to hold an Annual General Meeting (AGM) every year. To accomplish this, the concerned business’s Board of Directors must send a letter to the relevant bodies and officials announcing the AGM within four months of the fiscal year’s end. Furthermore, the AGM should have the following agendas ;
- To clarify the minutes of the previous Annual General Meeting.
- Approval of the director’s report on the business activities of the company.
- Recognize the previous year’s operational results for the company.
- Choose new directors to take the place of those who have been fired.
- Appointment of an auditor and calculation of audit fees.
- Consideration of dividends.
Auditing standards. When submitting financial statements and tax returns, the CPA’s audit opinion is required.
Regardless of whether the company is publicly traded or not, this audit should be performed. The financial statements of a Thai-registered partnership whose total capital, assets, and income do not exceed those specified in Ministerial Regulations are the only exception to this rule.
Thailand’s self-assessment tax system for foreign companies runs on a 12-month cycle that ends on December 31. Additionally, businesses have the option of selecting their own accounting period. If the period does not exceed 12 months, it is possible. However, prior permission from the Director-General of the Revenue Department is required to select an accounting period.
In April 2020, an announcement was made. According to it, all foreign businesses in Thailand must electronically file their financial statements with the Thai Ministry of Commerce’s Department of Business Development (DBD).
According to Thai law, any foreign company or business operating in Thailand, regardless of its type of incorporation or liability, is required to keep books and conduct annual audits.
These companies’ financial statements must adhere to Thai Financial Reporting Standards. It must adhere to International Financial Reporting Standards (IFRS). International accounting standards are used by the Thai Revenue Department. It may also include some local elements in addition to the international standards’ mandate.
International standards may be used by foreign companies and businesses. The majority of SMEs in Thailand, on the other hand, follow Thai Accounting Standards’ regulations and mandates (TAS). They also adhere to the Thai Accounting Standard for Non-Publicly Accountable Entities (Thai Accounting Standard for Non-Publicly Accountable Entities) (NPAEs). Companies listed on the Thailand Stock Exchange are required to prepare financial statements for quarterly audits by Thai auditors.
The following documents must be provided by both public and private companies in Thailand with limited liability. They are required to do so at the end of each accounting period.
The document clearly certifies the company’s name and business type.
- Directors’ professional and personal information.
- The Company’s Financial Statements are prepared in accordance with Thai Auditing Standards.
- The company’s balance sheet, which shows all transactions for each accounting period.
- The company’s profit and loss accounts.
- Shareholders’ list as of the date of the most recent Annual General Meeting.
- The Annual General Meeting Minutes.
Companies are required to prepare their documents in Thai for reporting purposes. While foreign companies are allowed to prepare documents in any language other than Thai, they must include a translation.
Private and public limited companies must have their financial statements audited by an independent auditor at the end of the fiscal year.
Businesses are required to keep their books of accounts for at least five years under the Accounting Act of 2000. Depending on the business activity, the Director-General of the Revenue Department may extend it for another seven years.
Noncompliance can result in penalties.
Failure to comply with these regulations by any Thai company or business can result in a fine of up to 200000 baht. For the defaulter company, it is equivalent to US$6400.
If a company in Thailand understates its annual profit by more than 25%, it will be charged a 20% surcharge. If the filing is incorrect, the surcharge is 100 percent, and if any company fails to file a return, the surcharge is 200 percent. There is a provision for a 50% penalty reduction. If a defaulter company approaches the authorities in writing, it is up to the discretion of the tax officer.