A deep dive into Specific Business Tax—who needs to pay, which businesses fall under this category, and key insights on interest income and filing Form Phor.Thor.40.
In the business world, there are multiple types of taxes that entrepreneurs must understand. One of them is "Specific Business Tax" (SBT), which many find confusing, especially in comparison to Value-Added Tax (VAT). Today, we will clarify everything about Specific Business Tax in detail, particularly regarding interest income, which often causes confusion among business owners.
Who Is Responsible for Paying Specific Business Tax?
Once we understand which businesses fall under Specific Business Tax, the next step is identifying who is liable to pay it. This tax applies to various types of entrepreneurs, whether they run large enterprises or small businesses. Let’s explore who is obligated to pay.
Domestic Entrepreneurs
- Individuals, such as sole proprietors, real estate brokers, or money lenders earning interest income
- Non-juristic groups, such as:
- Unregistered business partnerships
- Joint ventures between individuals
- Real estate investment groups
- Special Business Structures
- Undivided estates that generate taxable income
- Unregistered ordinary partnerships
- Investment funds with taxable income
- Large Organizations
- Government organizations
- Various types of cooperatives
- Legal entities governed by specific laws
Foreign Entrepreneurs
For businesses registered abroad but operating in Thailand, the liable tax payer includes:
- Local representatives
- Branch managers in Thailand
- Authorized agents
- Employees with management authority
- Person responsible business operators
- Executive overseeing operations in Thailand
- Decision-maker in business operations
- Assigned business manager
It is essential to note that all of the above parties share responsibility for filing Form Phor.Thor.40 and ensuring tax compliance, regardless of their business model.
Which Businesses Are Liable for Specific Business Tax?
What types of businesses must pay Specific Business Tax? Let’s take a detailed look.
1. Financial Institutions and Related Businesses
Since banking and financial institutions earn revenue primarily from interest income, they are subject to Specific Business Tax. This includes:
- Domestic and international commercial banks
- Finance and securities companies
- Credit foncier companies
- State-owned specialized financial institutions
2. Life Insurance Businesses
Life insurance companies are also liable for Specific Business Tax due to their unique financial structure, including:
- Companies underwriting insurance risks
- Businesses providing savings insurance
- Companies issuing policies with cashback provisions
3. Pawnshop Businesses
Including:
- Pawnshops that charge interest on loans
- Loan providers requiring collateral
- Businesses handling consignment sales
4. Businesses Operating Like Commercial Banks
Certain businesses that provide bank-like financial services must also pay Specific Business Tax, including:
- Lending money and earning interest income
- Guaranteeing and exchanging foreign currency
- Buying and selling bills of exchange and international money transfers
- Factoring services (trade receivables financing)
5. Commercial Real Estate Sales
Real estate transactions subject to Specific Business Tax include:
- Land development projects for sale
- Sales of condominium units
- Sales of buildings with land
- Sales of developed land plots
- Sales of real estate held for less than five years
6. Securities Businesses
Businesses engaged in securities-related activities that must pay Specific Business Tax include:
- Stock trading on the stock exchange
- Repurchase agreements (Repo transactions)
- Brokerage services for securities trading
7. Other Special Businesses
Certain businesses are specifically designated under Royal Decrees, such as:
- Factoring businesses
- Businesses operating like financial institutions
- Newly designated businesses in the future
What Is Form Phor.Thor.40 and How to File It?
Form Phor.Thor.40 is the tax return required for businesses subject to Specific Business Tax. It is particularly important for reporting interest income and other relevant revenues. Let’s look at how to prepare it.
1. Filling in Business Information
- Enter the business name and taxpayer identification number
- Specify the filing period
- Provide business location details
2. Calculating Revenue and Tax
- Report gross revenue before deductions
- Calculate tax due
- Include surcharges or penalties (if applicable)
Who Must File Form Phor.Thor.40?
Several types of businesses are required to submit Form Phor.Thor.40, including:
- Financial institutions with interest income
- Real estate businesses
- Companies conducting bank-like operations
- Life insurance companies
- Businesses earning revenue from lending money
When Must Form Phor.Thor.40 Be Filed?
Meeting tax deadlines is crucial, as late filings can result in fines. Here are the important deadlines:
1. Regular Filing Deadline
- ยื่นภายในวันที่ 15 ของเดือนถัดไป
- ต้องยื่นทุกเดือนไม่ว่าจะมีรายรับหรือไม่
2. Online Filing Deadline
- Extended by 8 days
- Can be submitted until the 23rd of the following month
3. Special Cases
- If the monthly tax due is less than 100 THB, it is exempt
- However, a tax return must still be submitted
Conclusion
Effectively managing Specific Business Tax is no longer a challenge if you understand the basics, have a proper document management system, plan for Form Phor.Thor.40 filing, and keep up with regulatory changes.
With the right knowledge and preparation, handling Specific Business Tax can become an efficient and seamless part of your business operations.
Related Search Terms
- Specific Business Tax
- Phor.Thor.40
- Filing Phor.Thor.40 for interest income
- Businesses subject to Specific Business Tax
- Specific Business Tax on interest income
