Tax for opening a restaurant for new entrepreneur, manage finance and accounting perfectly! With easy short brief details!

Jan 31, 2022
Many people have now become new entrepreneurs who may think of working system in restaurant to make the Wow recipe to impress customer coming to their shop again and again. But little do you know that many people would pay their attention to “TAX” as the last thing.

Today, MHA summarized the new tax edition for opening a restaurant to answer these questions - “What are these taxes?” “Which documents must be kept as evidence?” “How much money do I need to prepare?” “”How do I make an account? “What do I need to register?”. To advise new entrepreneurs who are enthusiast preparing for taxes from the beginning of the year, managing your finances and accounting perfectly!

1. Personal Income Tax 

Tax levied on individuals with annual income check with the income generated during the year.  A person who earn is obliged to show list items in the prescribed tax return form. According to law, Income which earns from opening a restaurant is considered as income Type 8, it requires tax submitting in every half-year which; 

- 1st Time submit Personal Income Tax Return half year tax (P.N.D. 94) within July-September for calculating total balance from January till June. 
- 2nd Time submit Personal Income Tax Return for taxpayer with income not only from employment (P.N.D. 90) within March of the following year for calculating total balance of entire month from January till December by deducting tax paid in first time from the tax calculated on second payment.
If we open restaurant without registering as juristic person, we have to use the income from sales to calculate for personal income tax every year. 
To submit this type of tax, prepare proof of income, expense as receipts as evidence for actual tax deduction or use deduction with fixed tax less than 60% to avoid the difficulty for collecting and submitting large number of documents. 
Read more about tax rate and reduction => 

2. Corporate Income Tax

Those who are liable for this tax are Company or juristic partnership registered under the Civil and Commercial Code including other juristic persons who does not register under the Civil and Commercial Code. It means that if we open a restaurant and register a company as partnership, joint venture or a group of person, we must pay for this tax. It is different from personal income tax because corporate income tax uses an accounting period for calculating and deadline to submit on any specified beginning and ending as prefer. The amount of tax will be calculated from Net profit multiplied by the specified tax rate.

Restaurant which is subject to corporate income tax also requires to submit tax return twice a year:
  • 1st time ครั้งแรก Half – Year Corporate lncome Tax (PND. 51) is half accounting period income tax, submit within 2 months after completed round of 6 months of accounting period 
  • 2nd time Income Tax Return for Companies or Juristic Partnerships under section 68 and section 69 of the Revenue Code (P.N.D. 50) is an income tax at the end of accounting period, submit within 150 days from the last day of the accounting period 
Read more about tax rate and reduction => 

3. Value Added Tax or VAT 

tax on the sale of goods or providing services in each production process and selling products or services both domestically produced and imported from abroad. They are usually charged VAT at a rate of 7% which will be added to the product price. If we registered for VAT, we have to raise food price to cover VAT because we must not forget that when we buy ingredient, we also pay VAT to suppliers as well.

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Restaurant which is subject to VAT registration: 

Restaurant which is subject to VAT registration: 
- Entrepreneur who earn more than 1,800,000 baht (before deducting expenses) must register within 30 days from the date of over amount 
- Business selling products or providing services must have purchased or received services that are subject to VAT such as installing machines, construction of office building and factory construction, can submit an application for registration within 6 months prior to the starting date of business or;
- Entrepreneur who do import goods from abroad 
Entrepreneur must keep a receipt from supplier to report as purchase tax. And to issue tax invoice to customer and record in tax report for tax calculating in each month because value added tax must be submit on monthly basis with Value Added Tax Return under the Revenue Code (P.P.30) every month by day 15 of the following month whether there is sales or not.
Read more about value added tax (VAT) => 

4. Withholding tax 

an advance tax collection that requires payer to deduct the tax from the money paid to the recipient every time of. Tax deduction must be in accordance with the specified rules, procedures and conditions, and that money will be sent to the Revenue Department.
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Money that subject to withholding tax is the cost from rent, wages, goods manufacturing, prizes from sweepstakes, advertising, transportation, service fees and dividends. These must be withholding tax, in case that the employee earns more than 26,000 baht per month, submitted to the Revenue Department by day 7 of the following month.
Read more about withholding tax =>[D1] 

5. Signboard Tax 

tax collected from any signs that show name, brand or symbol used in trade or operated in other business for earning or for commercial advertising as the sign that we usually see over the tall building or the street include digital sign that its content can move.
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- Any styles of board or label must be paid for tax for example, name tag, brand label and logo label consisting of letters, image, regardless of size.
- Label sign which must not be paid for tax is sign inside the building, sign with wheels (must be for moving in and out), banner according to event that are held from time to time, government sign, school sign of both public and private schools, temple signs, associations sign, foundations signs, sign attached or displayed on personal car/motorcycle/ road roller or tractor. Signs that installed or displayed on vehicle with an area must not be more than 500

Signboard tax rate 

- Sign with all Thai letters which moving text or changing to other text, signboard tax rate is 10 baht per label size 500 The sign except from above, the rate will be 5 baht per 500
- Sign with Thai and English letters and/or with image and/or with symbol, sign with symbol or moving image or changing to symbol message or any images, the rate will be 52 baht per 500 The sign except from above, the rate will be 26 baht per 500
-Sign with no Thai letter whether there are image or any symbols, and sign that some part has Thai letters or all are below or below foreign letters, sign with text, mark or moving image or changing message, symbol or image, the rate is 52 baht per 500 Sign except from the above, the rate will be 26 baht per 500  
If a new sign is installed or changed, owner must submit signboard tax return form 1 within 15 days and submit the annual signboard tax by March at the district office, municipality or local administrative organization where the sign is installed in that location.
Read more about label tax => 

6. Land and building tax 

local tax dividing different type of lands into sections which restaurant is considered to be a land for commercial and industrial sector. As it’s used for commercial industry, office building, hotel, restaurant and others. The highest tax ceiling is at 1.2% but presently, tax rate is maintained at 0.3-0.7% as follows;
- Land values 0 – 50 million baht, rate 0.3% or 3,000 baht per million.
- Land values 50 –200 million baht, rate: 0.4% or 4,000 baht per million.
- Land values 200-1,000 million baht, rate: 0.5% or 5,000 baht per million.
- Land values 1,000 – 5,000 million baht, rate: 0.6% or 6,000 baht per million.
- Land values 5,000 million baht or more, rate: 0.7% or 7,000 baht per million.
If we own the land where the restaurant is located, we have to pay this tax as well. Normally there will be a letter informing the appraisal of land and building with a guideline to pay to local government according to location of land.
Read more about land and building tax => 

7. Customs Duty 

If our shop has an order to import material, equipment, ingredient, machine which are in the list of import duty, we must pay for customs duty. Each category of import goods are not the same cost to pay. Therefore, it is necessary to know customs clearance and tariffs for a better understanding before importing your shop's equipment abroad.
Read more about tax and tariffs => 
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