Why do we need to do a financial statement (they call the balance sheet ) for our company? If we don’t, what will happen?
All companies in Thailand have to prepare and keep accounts, even if the company has just been used to buy property it must still submit a balance sheet at the end of the year.
The accounts have to be drafted according to the Thai Accounting Standards formulated by the Institute of Certified Accountants and Auditors of Thailand, and should reflect a true and correct image of the company’s expenses and assets. For this purpose you need to use a Thai accounting company.
A new company can choose whether to close its first accounting year within 12 months after its registration or on December 31st of that year. Once you have chosen the date you should stick to that date every year.
What is a balance sheet?
A balance sheet is an overview of the company assets and liabilities and the profit and loss. Accounts have to be prepared and filed at the end of each period. The accounting year may be changed, but written approval from the Director General of the Revenue Department is required.
Even if your company has not traded that year, you still have to prepare and submit a balance sheet which has been examined and certified by a licensed accountant.
Failure to submit a balance sheet could result in a fine of up to 200,000 THB.
Further to this you are also required to submit a half year report and make a pre-payment of any corporate income tax due. You need to predict your annual net income and any tax due and pay half of any tax which will be due. Your accountant can help you with the half year report and predictions.
It is important to be as accurate as possible with these predictions because if the actual year-end profitability amounts to more than double the forecast – an additional 20% tax could be due on the difference between the forecast and the actual tax due.