Legal
How to Complete the Annual Closing Process for Company Accounts (Year-End Closing)
In Thailand, most companies close their financial year on December 31st, meaning they must complete their account closing and satisfy all Thai accounting regulations within 150 days of this date.
In this guide, we walk you through the key steps of the annual closing process, including key compliance requirements, preparation of financial statements, audit procedures, and the requirements for holding an Annual General Meeting (AGM).
Points clés
- All Thai companies must complete their year-end closing within 150 days of their financial year end in Thailand (typically December 31st), even if the company is dormant.
- Financial statements in Thailand must include a balance sheet, profit and loss statement, statement of changes in equity, and cash flow statement.
- Financial statements must be subject to an independent audit in Thailand. The audit must be completed by an independent auditor, companies cannot do it themselves.
- Companies must hold an Annual General Meeting (AGM) in Thailand within 120 days of the financial year end as per the Thai Companies Act, with at least one-quarter of shareholders present or represented by proxy
- After AGM approval, financial statements must be submitted to the Ministry of Commerce Thailand within one month, with all documents in Thai (though translations can be included).
- Failing to comply can result in fines up to 200,000 THB, and may impact the renewal of a work permit for foreign employees in Thailand or even the BOI Thailand status of the company.
Which Companies Have to Complete the Annual Closing of Accounts and Submit Annual Filings in Thailand?
All registered companies and businesses in Thailand are required to maintain proper accounts as per Thai accounting regulations. Such companies are also required to complete the year-end closing process and submit annual filings to satisfy the accounting requirements in Thailand.
This is also a mandatory requirement for companies that do make any transactions or undertake any business activities during the year.
It is important to be aware that Thailand does not have an official Dormant Status for companies. Therefore, even if the company has no activity or transactions, in the eyes of the law it is seen as an operating company for legal, accounting, and tax obligations and is subject to Thailand’s accounting requirements.
Lire plus : Dormant Companies in Thailand: Compliance, Benefits, and Legal Obligations
What are the Requirements to Close Company Accounts in Thailand?
In Thailand, the majority of companies have chosen to have their financial year run from January 1st to December 31st. However, there are certain exceptions to this, such as:
- the first accounting period after incorporation,
- the final period before dissolution, or
- when a change in the accounting period is approved by the Revenue Department and the Business Development Department.
However, it is important to note that the accounting period cannot exceed 12 months, and whenever your financial year ends in Thailand, the annual Corporate Income Tax (CIT) Thailand return must be submitted within 150 days of that date.
How Do You Close Your Company Accounts in Thailand?
In order to complete the annual closing (year-end closing) of the company accounts the company must first prepare their financial statements.
A financial statement is a written record that shows the business activities and the financial performance of a company over the past year. Financial statements in Thailand must include the following:
- Statement of financial position (Balance Sheet) – This document shows the company’s assets (what it owns), liabilities (what it owes), and equity (the owner’s stake).
- La profit and loss statement – a summary of the company’s revenues, expenses, and overall profit or loss.
- Statement of Changes in Equity – details for any changes in a company’s shareholder equity over the previous financial year.
- Cash flow statement – summary of the movement of cash coming in and out of a company.
- Other required information:
- Criteria of the preparation of the financial statements
- Description of the accounting policies
- Additional information on the balance sheet, income statement, cash flow statement and statement of changes in equity.
Does the Company Need to Have an Annual Audit?
Before submitting the companies financial statements for the previous financial year to the Ministry of Commerce in Thailand, they must be audited by a certified independent auditor. The audit is required to make sure that the financial statements are accurate and fully compliant with Thai accounting regulations.
An independent audit in Thailand must be completed by a certified auditor only. The auditor cannot work for the company whose financial statements are being and must be fully independent. This means the company’s internal accounting team cannot complete the audit for the company.
Lire plus :
The Importance of Annual Audit in Thailand: A Comprehensive Guide
When Should the Company Hold an AGM?
In Thailand, companies are required to hold at least one Annual General Meeting (AGM) in Thailand per year as per the Thai Companies Act. The AGM must be held within 4 months (120 days) of the end of the company’s financial year.
The purpose of the AGM is to discuss and approve matters related to the company’s operations, including the approval of audited financial statements.
What are the Requirements for Calling an AGM?
To call an AGM, the following steps must be completed:
- Notice of Meeting – a formal notice must be sent to all shareholders, directors, and the auditor and state the date, time, venue, and agenda of the AGM.
- Publication Requirement – previously companies in Thailand had to publish a notice for their AGM in a local newspaper and mail an invitation to every shareholder listed in the Company register by no later than seven days before the meeting date (or 14 days for special resolutions). However, this is no longer the case, unless a Company has a shareholder holding a bearer certificate.
- However, in practice, many companies include mechanisms for calling an AGM within their Articles of Association (AOA). If these clauses have not been updated in the AOA to reflect the changes in the notification requirements, then it must still comply with the publication requirements.
- Agenda of the Meeting: an AGM must include the following:
-
- Approval of the audited financial statements
- Appointment or reappointment of the company’s auditor
- Declaration of dividends (if applicable)
- Election or re-election of directors (if applicable)
- Any other statutory or business-related matters.
- Quorum Requirements – at least one quarter of the total shareholders or shareholders holding at least one-fourth of the total issued shares must be present, either in person or via proxy.
What Happens if an AGM is not Held?
Please note, the penalties for not arranging the Annual General Meeting to approve the audited financial statements within 4 months after the fiscal year end are:
- Company penalties – a fine not exceeding THB 20,000
- Director(s) penalties – a fine not exceeding THB 50,000
When Should the Final Filing be Submitted?
After receiving approval for the financial statements at the AGM, they must be submitted to the Ministry of Commerce Thailand within 1 month of the AGM.
The following documents must be submitted:
- Audited financial statement
- Balance sheet
- Company name
- Detail of directors
- List of shareholders
- Minutes of the annual meeting
- Profit and loss accounts
- Type of business
Please note, all the documents must be submitted in Thai, however, the documents can be prepared in another language along with a Thai translation.
If the company is due to pay any outstanding tax, the payment can be made after the filing of the documents at the Ministry of Commerce in Thailand.
What are the Penalties for Not Submitting an Annual Filing?
Individuals or entities that do not comply with Thailand’s accounting regulations may face a penalty of up to 200,000 THB.
Furthermore, if a company’s half-year Impôt sur le revenu des sociétés (CIT) Thailand return (PND 51) understates its profits by more than 25% compared to the final full-year results, a 20% penalty will be imposed on the shortfall. In addition, a 100% surcharge can apply for incorrect filing, and a 200% surcharge can be enforced for failing to file the return altogether.
Toutefois, si le contribuable soumet une demande formelle à l'agent du fisc, une réduction de la pénalité pouvant aller jusqu'à 50 % est possible.
Do Dormant Companies Have to Submit Annual Filings?
All registered businesses in Thailand are required to keep up to date and proper accounts and submit their yearly filings. This is also applicable to companies that remain dormant and/or do not have any transactions or undertake any business activities during the year.
How Does the Closing of Accounts Affect the Work Permits for Foreign Employees in Thailand?
Closing a company’s accounts on time is important for businesses employing foreign workers. Delays or failure to complete the annual account closing process can impact a company’s ability to renew work permits for foreign employees in Thailand.
If financial statements are not properly filed, the Labour Department may refuse work permit renewals until the company meets its compliance obligations.
The same applies to companies with BOI Thailand (Board of Investment) promotions. However, in this case, failing to submit the required reports on time could result in the loss of BOI status, along with the ability to sponsor work permits for foreign employees.
Comment Belaws peut-il vous aider ?
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Questions fréquemment posées
What is the Easy E-Receipt 2.0 program?
The Easy E-Receipt 2.0 program is a government initiative in Thailand that allows taxpayers to claim personal income tax deductions on eligible purchases made using e-tax invoices and e-receipts from registered businesses.
What is the maximum tax deduction I can claim in Thailand?
The maximum total deduction is 50,000 THB per person.
How are the tax deductions structured?
- Up to 30,000 THB for purchases from VAT-registered businesses and non-VAT vendors issuing e-tax invoices.
- An additional 20,000 THB for purchases from OTOP businesses, community enterprises, and registered social enterprises.
Can married couples claim their tax deduction separately?
Yes, if they have separate sources of income, each spouse can claim up to 50,000 THB.
Who is eligible for the program?
Both Thai and foreign tax residents in Thailand who are required to file tax returns.
Which businesses qualify for the program?
Retailers, service providers, VAT-registered businesses, and online businesses that issue e-tax invoices and e-receipts through the Thai Revenue Department’s system.
What types of purchases are eligible?
Most goods and services qualify, but alcohol, tobacco, fuel, and lottery tickets are not eligible.
What payment methods are accepted?
Only purchases made via cash, credit/debit card, or PromptPay are eligible. Payments made using gift cards do not qualify.
Do I need to manually submit receipts?
No, businesses will automatically submit electronic receipts to the Revenue Department. Taxpayers will also receive a copy via email for their records.
How does the tax deduction apply?
The deductions can be claimed when filing annual tax returns, reducing overall personal income tax (PIT) liability.
Can multiple purchases be combined?
Yes, multiple eligible purchases can be combined to reach the maximum deduction of 50,000 THB.
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