Page 196 - Social Enterprise A New Business Paradigm for Thailand

tax but must still submit tax filings. This exemption applies only to corporate income tax;
for other taxes, such as value-added tax (VAT), non-profit-distributing social enterprises

that are VAT-registered remain responsible for VAT.

A non-profit-distributing social enterprise will lose its tax exemption in the following cases:

• Changing status from “non-profit-distributing” to “profit-distributing,” effective
from the first accounting period in which tax benefits were received
• Having its registration as a social enterprise revoked, effective from the date the
revocation takes effect
• Ceasing to operate as a social enterprise before completing five years from the
registration date, effective from the first accounting period in which tax benefits
were received

• Ceasing to operate as a social enterprise after completing five years from the
registration date, effective from the accounting period in which cessation occurs
• Terminating the business, effective from the accounting period in which
termination occurs
• Failing to comply with the specified criteria, procedures, or conditions, effective
from the first accounting period in which tax benefits were received

(1.2) Tax Responsibilities of Profit-Distributing Social Enterprises

Profit-distributing social enterprises that share profits with shareholders up to 30% are
subject to corporate income tax at a rate of 20% of net profits.

However, if the social enterprise is a company or legal partnership with registered capital
not exceeding 5 million baht and annual revenue from sales and services not exceeding
30 million baht, it is eligible for reduced tax rates 159 as detailed in Table 6.8.

Table 6.8
Tax Responsibilities and Corporate Income Tax Benefits of Social Enterprises
Type of Social Enterprise Corporate Income Tax Benefits
Non-profit-distributing social enterprises (must be a legal Exempt from corporate income tax
entity such as a registered partnership or company)
Net Profit Tax Rate
Net profit portion not exceeding
Profit-distributing social enterprises Exempt
300,000 baht
(SMEs with registered capital not exceeding 5 million baht
Portion over 300,000 baht but
and annual revenue not exceeding 30 million baht) 15%
not exceeding 3,000,000 baht
Portion over 3,000,000 baht 20%

159 Royal Decree issued under the Revenue Code on Tax Rate Reduction and Exemption (No. 603), B.E. 2559 (2016),
given on April 18, 2016, amending Royal Decree (No. 530), B.E. 2554 (2011), as further amended by Royal Decree
(No. 583), B.E. 2558 (2015).
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