Accounting in Thailand - What You Need to Know

Thailand economy is among of the fastest growing economies in Southeast Asian region. The country is one of 'Asian Tigers' economies. Thai government has enhanced regulatory efficiency and better incorporates the country's economy into a global marketplace. The regulatory framework has become transparent and efficient, with processes for business formation streamlined and also the financial sector opened for competition. The country enjoys a high level of trade freedom. This has attracted foreign investors from all over the world. All companies in Thailand have obligations when it comes to accounting.

Accounting Standard in Thailand

Accounting standard pronouncements in Thailand are issued by institute of certified accountants and auditors of Thailand (ICAAT). Companies must follow accounting and auditing guidelines when preparing for their financial statements. Accounting in Thailand is quite different from other countries, but the procedures that are used are similar to Generally Accepted Accounting Principles (GAAP) of the United States.

ICAAT has issued over 16 accounting standards in areas of earning per shares, accounting policies, income statements, government taxes and different accounting changes which have developed in recent years. Accounting in Thailand is controlled by the BSAP, Board of Supervision for Auditing Practice. This board governs the accounting standards in Thailand and makes amendments when it sees some kinds of improvements in existing accounting as well as auditing policies.

All Companies in Thailand Must Prepare Accounts

All companies operating in Thailand must prepare records of transactions. Transactions can be any kind. For instance, it may be debit transactions or credit transactions. All companies must also prepare the list of transactions done to purchase things overseas. This rule is not only applicable to limited companies, but also to registered partnerships, joint ventures, public limited companies, registered offices as well as proprietary firms.

Only a private individual is exempted from this requirement. Accounts should be drafted in accordance with Thai accounting standards set by the ICAAT and must reflect a correct image of the business's expenses and assets.

New Companies

New companies are required to close their first accounting year within 1 year after their incorporation, and for the following years accounting period must closed after every 12 months. An overview of the liabilities and assets, profit and loss accounts and balance sheet should be filed at the end of every period. Accounting year might be changed, although one requires written approval from the Revenue Department. Newly incorporated companies in Thailand must obtain TIN, taxpayer identification number within 2 months of incorporation.

Financial Statements Must Be Examined

All financial statement must be monitored by a legally certified accountant irrespective of whether a company has made sales or not. The duly signed off accounts must be accepted by Annual Shareholders' Meeting. Once approved, financial statements should be submitted to the Commercial Registrar and Revenue Department within 30 days. The accounts and other important documents of the company should be kept at the company's address for at least five years.

All Thai as well as foreign companies registered in Thailand have numerous obligations when it comes to tax and accounting. This information will help you understand accounting rules and processes for doing business in Thailand.