Revenue Tax SBT

Specific business tax (SBT) is imposed on certain types of businesses whose value added is difficult to define such as banking, finance, credit foncier, life insurance, pawnshops, and real estate. Such businesses are considered to be outside the VAT system and therefore are not subject to VAT (source: the Thailand Revenue Department).

Chapter 5

Specific Business Tax

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Section 91 Specific business tax is an assessment tax.

Section 91/1 In this Chapter:

(1) "Gross receipts" means cash, property, consideration or any gain with value 1 received or receivable from business carried on whether in or outside Thailand.
(2) "Value" means market price of a property, a business, a consideration or any gain.
(3) "Market price" means price of goods or services actually existing at any one moment.

In the case where several market prices exist, or a market price is not known, the Director-General with the approval of the Minister has the power to prescribe, by notification, computation rules in order to arrive at a market price to be adopted as the value of goods or services.

(4) "Sale" includes an agreement to sell, sale with rights of redemption, exchange, gift, hire-purchase, or disposal and transfer with or without consideration.

The definitions of "person", "individual", "non-juristic body of persons", "juristic person", "agent", "place of business", and "tax month" under Section 77/1 shall be applied in this Chapter.

Section 91/2 Subject to Section 91/4, the following businesses carried on in Thailand shall be subject to specific business tax under the provisions of this Chapter:

  1. banking under the law governing commercial banking or any other specific law; 
  2. business of finance, securities and credit foncier under the law governing operation of the business of finance, securities and credit foncier; 
  3. life insurance under the law governing life insurance; 
  4. pawn broking under the law governing pawnshops; 
  5. business with regular transactions similar to commercial banks, such as provision of loans, provision of guarantees, exchange of currencies, issuance, purchase or sale of bills or transfer of money abroad by different means; 
  6. sale of an immovable property in a commercial or profitable manner, irrespective of the manner in which such property is acquired, only in accordance with the rules, procedures and conditions prescribed by a royal decree; 
  7. sale of securities in a securities market under the law governing securities exchange of Thailand; 
  8. any other business as prescribed by a royal decree. 

In the case where a foreign resident carries on business through his place of business or agent in Thailand, he shall be treated as carrying on business in Thailand under this Section.

In the case where a question arises as to whether which business is a business in accordance with (5), the Director-General shall request the Commission of Taxation to define the scope and conditions of such business that is subject to this Section. After the Commission of Taxation has given its ruling, the ruling shall be published in the government gazette.

Section 91/3 Specific business tax shall be exempt for the following businesses:

  1. business of the Bank of Thailand, the Government Savings Bank, the Government Housing Bank, and the Bank for Agriculture and Agricultural Cooperatives; 
  2. business of the Industrial Financial Corporation of Thailand; 
  3. business of a savings cooperative, only in respect of loans provided to its members or to another savings cooperative; 
  4. business of a provident fund under the law governing provident funds; 
  5. business of the National Housing Authority, only in respect of sale or hire-purchase of an immovable property; 
  6. pawn broking business of a ministry, sub-ministry, department and a local government authority; 
  7. any other business under Section 91/2 as prescribed by a royal decree.

Section 91/4 The following specific transactions of a business prescribed under Section 91/2 shall be subject to value added tax under Chapter 4:

  1. a specific transaction not directly related to a business under Section 91/2; 
  2. a specific transaction directly related to a business under Section 91/2 and specified by a royal decree as a transaction that is subject to value added tax. 

In the case where a question arises as to whether a transaction is directly related to a business under Section 91/2, the Director-General shall request the Commission of Taxation to define the scope and conditions of such transaction. After the Commission of Taxation has given its ruling, the ruling shall be published in the Royal gazette.

Section 91/5 The tax base for a business in accordance with the provisions of this Chapter shall be the following gross receipts received or receivable from the business carried on by a person liable to tax:

(1) For banking under Section 91/2 (1), gross receipts from the operation of business shall be:

  • (a) interest, discount, fee, service charge, or gross profit from purchase or sale of, or received from, any bill of exchange or debt instrument, and 
  • (b) gross profits from exchange or trading of currencies, issuance of any billexchange or debt instrument, or remittance of money abroad.

(2) For business of finance, securities or credit foncier under Section 91/2 (2), gross receipts from the operation of business shall be

  • (a) gross receipts under 1 (a), and 
  • (b) gross receipts under 1 (b).

(3) For life insurance under Section 91/2 (3), gross receipts from the operation of business shall be interest, fee or service charge.

(4) For pawn broking business under Section 91/2 (4), gross receipts from the operation of business shall be:

  • (a) interest, fee, and
  • (b) cash, property, consideration or gain with value received or receivable from sale of forfeited pawned goods.

(5) For a business with regular transaction similar to a commercial bank under Section 91/2 (5), gross receipts from the operation of business shall be:

  • (a) gross receipts under 1 (a), and\
  • (b) gross receipts under 1 (b).

(6) For business of sale of an immovable property in a commercial or profitable manner under Section 91/2 (6), gross receipts from the operation of business shall be gross receipts before deduction of any expenses. 

(7) For business of sale of securities in a securities market under the law governing securities exchange of Thailand under Section 91/2 (7), gross receipts from the operation of business shall be gross receipts before deduction of any expenses. (8) For any other business under Section 91/2 (8), gross receipts from the operation of business shall be prescribed by a royal decree.

Section 91/6 The rates of specific business tax are as follows:

  1. 0.1 per cent on gross receipts under Section 91/5 (7); 
  2. 2.5 per cent on gross receipts under Section 91/5 (3) (a) and 91/5 (4); 
  3. 3.0 per cent on gross receipts in all cases under Section 91/5 except (1) and (2).

Section 91/7 A person carries on business subject to the provisions of this Chapter shall be liable to tax in accordance with the provisions of this Chapter.

In the case where an operator is a foreign resident, a resident of Thailand, including an employee, agent or representative, who is responsible for the operation of business and has a direct or implied power of management, shall be jointly liable to tax with the person under paragraph 1.

Section 91/8 A person liable to specific business tax shall pay tax by calculating from the tax base in accordance with Section 91/5 during a tax month at the rate prescribed in Section 91/6. But he shall have the right to appeal against an assessment of tax under the provisions governing appeals in Part 2, Chapter 2, Title 2.

The calculation of gross receipts under paragraph 1 shall follow the accounting method, rule and practice, and, for the purpose of calculation of gross receipts, any such method, rule and practice once adopted shall be applied consistently except where he obtains the approval of the Director-General to make any changes.

The provision under paragraphs 1 and 2 shall not apply to the person liable to specific business tax from the sale of an immovable property in a commercial or profitable manner in accordance with Section 91/2 (6), and such person shall pay tax by calculating from the tax base in accordance with Section 91/5 (6) at the time of registering rights and juristic acts of that immovable property, under the rate prescribed in Section 91/6, and shall be entitled to make an appeal against the assessment of tax under provision governing appeals in Part 2, Chapter 2, Title 2.

Section 91/9 In the case of business of sale of securities under Section 91/2 (7), a member of the Stock Exchange acting as the agent of the seller shall deduct specific business tax from the proceeds of sale and file a tax return and pay tax in accordance with Section 91/10 in his own name on behalf of the seller. The seller is not required to file a tax return and, in this case, the member shall be deemed a person liable to specific business tax.

Section 91/10 A person liable to tax shall file a tax return in the form prescribed by the Director-General every tax month and altogether pay tax, if any, whether or not he has any gross receipts in the tax month.

The filing of a tax return and payment of tax for any tax month shall be made on or before the fifteenth day of the following month unless the Director-General prescribes otherwise. The filing of a tax return and payment of tax shall be made at a local Amphur office where a place of business is located unless the Director-General prescribes otherwise. If a person liable to tax has several places of business, the filing of a tax return and payment of tax under paragraph 1 shall be made separately for each place of business; except w here such a person submits an application to the Director-General requesting to file a tax return at a local Amphur office or at the place prescribed by the Director-General in accordance with paragraph 3, and the Director-General may give approval if he deems proper.

The provisions of paragraph 1 through 4 shall not apply to the filing of a tax return and payment of tax by a person liable to specific business tax who carries on business only of the sale of an immovable property in a commercial or profitable manner under Section 91/2 (6). Such a person shall file a tax return in the form prescribed by the Director-General at the time of registering the rights and juristic acts on the immovable property and, altogether, shall pay the tax to the official who records the registration of such rights and juristic acts. For the payment of tax in accordance with paragraph 5, the Department of Land shall collect specific business tax for the Revenue Department. The official is prohibited from signing an acknowledgement, approving or recording the act until he receives full payment of the tax payable. The tax already paid in accordance with paragraph 5 shall be remitted as government revenue under the regulations prescribed by the Minister.

Section 91/11 A refund of specific business tax may be made under the following conditions:

  1. The person liable to tax is entitled to submit a claim for tax refund within 3 years from the date of expiry of the time limit for filing a tax return.
  2. A claim for tax refund shall be in the form prescribed by the Director-General and shall be submitted at a local Amphur office where his place of business is located; except where he has been approved by the Director-General to file a consolidated return at any local Amphur office or at any other place in accordance with paragraph 4 of Section 91/10, then he shall submit a claim for tax refund at such place.

Section 91/12 A person carries on business subject to specific business tax under Section 91/2 is required to register for specific business tax if such business is not exempt under Section 91/3 and such person is not exempt from specific business tax registration under Section 91/13. He shall file an application for regist ration within 30 days from the first day of operation of the business. An application for specific business tax registration in accordance with paragraph 1 shall be in the form prescribed by the Director-General and shall be submitted at a local Amphur office where the place of business is located. If an operator has several places of business, he shall submit the application at the Amphur office where the place of business that is the head office is located.

The rule, procedure and condition with respect to an application for specific business tax registration and on the issuance of a specific business tax registration certificate shall be as prescribed by the Director-General.

In the case of an operator who is a foreign resident, a person w ho is an agent of such operator shall be responsible in undertaking specific business tax registration for the operator who is a foreign resident.

Section 91/13 An operator shall be exempt from specific business tax registration as follows:

  1. operator of business of sale of securities in accordance with Section 91/2 (7);
  2. operator of temporary business; 
  3. operator of any other business prescribed by the Director-General whenever there is reasonable ground.

The Director-General shall have the power to prescribe rule and condition for determining the characteristics of a temporary business in accordance with (2).

Section 91/14 A person liable to specific business tax shall have the obligation to prepare a record of taxable gross receipts as well as gross receipts that are excluded in the calculation of tax.

The record to be prepared in accordance with paragraph 1 shall be in the form prescribed by the Director-General and shall be made separately for each place of business. The method of making an entry in a record shall follow the rule, procedure and condition prescribed by the Director-General. An entry shall be made within 3 days from the date of deriving gross receipts, except in the case of some categories of business where the Director- General deems proper or in the individual case of necessity where the Director-General prescribes otherwise as he deems proper.

Section 91/15 The assessment official shall have the power to assess tax, penalty and surcharge under this Chapter, if:

  1. it appears to the assessment official that a person liable to tax does not file a return within the time limit specified by law;
  2. the assessment official has evidence indicating that a person liable to tax filed a return inaccurately or erroneously distorting the amount of tax payable; or
  3. a person liable to tax or a person liable to file a return on the operator’s behalf failed to comply with a summon issued by the assessment official, refused without a justifiable ground to give answers when questioned by the assessment official, or was unable to produce evidence in respect of the calculation of tax.

Section 91/16 For the purpose of proceeding with the provisions of Section 91/15, the assessment official shall have the power to:

  1. prepare items in a return on the basis of evidence which is believed to be correct where the operator has not filed a return;
  2. adjust any items in a return or in any supporting document to a return;
  3. determine the selling price of goods by comparing with the selling prices of the same category or type of goods on the same or approximate date on the basis of comparable market prices; 
  4. determine the amount of interest, discount, fee, service charge, gross profit from purchase or sale of a bill of exchange, or exchange or trading of currencies, issuance of a bill of exchange, or remittance of currencies abroad on the basis of comparable market prices;
  5. determine the gross receipts which an operator should receive where control or relationship in capital or management exists between the operator and the purchaser;
  6. determine the amount of interest, price of a property or service charge on the basis of a market price on the date of provision of a loan, transfer of a property or provision of service, in the case where interest, compensation, or consideration is not charged for the provision of the loan, the transfer of the property or the provision of the service, or is charged at a price lower than the market price without a justifiable ground;
  7. determine gross receipts on the basis of the standard of living or behavior of an operator, business statistics of the operator or of other operators carrying on similar businesses, or on any other basis which may reasonably indicate the amount of gross receipts;
  8. In the case of Section 91/15 (13), the assessment official may assess the tax according to his knowledge or judgment without having to follow any of the methods under (1) through (7).

Section 91/17 If in any tax month, the tax under this Chapter is less than 100 Baht, payment of such tax shall be waived for the tax month.

Section 91/18 A person who carries on a business subject to specific business tax without registering for specific business tax in accordance with Section 91/12 shall be punished with imprisonment not exceeding 1 month or a fine not exceeding 5,000 Baht or both. A person under paragraph 5 of Section 91/12 who neglects to proceed with the registration of an operator who is a foreign resident shall face the same punishment as in paragraph 1.

Section 91/19 A person liable to specific business tax who does not prepare a record in accordance with Section 91/14 shall be punished with imprisonment not exceeding 6 months or a fine not exceeding 10,000 Baht or both.

Section 91/20 A person liable to specific business tax who neither prepares a record in the prescribed form nor separately for each place of business; or who makes an entry in a record that does not follow the rule, procedure and condition prescribed under paragraphs 2 or 3 of Section 91/14, shall be punished with a fine not exceeding 2,000 Baht.

Section 91/21 The following provisions in Chapter 4 shall apply mutatis mutandis :

  1. part 7, Filing of Returns and Payment of Tax, Section 83/2 and Section 83/3;
  2. part 8, Tax Credit and Refund of Value Added T ax, Section 84/3;
  3. part 9, Value Added Tax Registration, Sections 85/4, 85/5, 85/6, 85/7, 85/8, 85/9, 85/12, 85/13, 85/14, 85/15, 85/16, 85/17, 85/18 and 85/19; 
  4. part 11, Preparation of Records and Maintenance of Documents, Section 87/3;
  5. part 12, Power of Assessment Official, Section 88/3, 88/4 and 88/5;
  6. part 13, Penalties and Surcharges, all Section;
  7. part14, Punishment, in connection with the provisions of the Section listed above including Section 90/5.
  8.  

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This translation is prepared for reference purposes. Only the Thai script version as published in the royal Thai government gazette shall have legal force in Thailand.