Petroleum Income Tax (PT)
Petroleum Income Tax (PT) is a direct tax, levied annually (for each accounting period of 12 months duration) on net profit of a “petroleum taxpayer”, who is carrying out the business of petroleum exploration and production. It is also levied on the disposal of profits outside of Thailand. The rules and regulations for Petroleum Income Tax are covered under Petroleum Income Tax Act and other related law. The rates, penalties, surcharge, etc. are different from that of Corporate Income tax.
An accounting period is normally 12 months. The Director General may grant permission for more or less than 12 months, if appropriately justified. The first accounting period shall begin on the day that the company makes its first sale or disposal of petroleum subject to royalty. This day is considered as the beginning date of the accounting period. An accounting period may be shorter than 12 months for the following case:
In the case the company transfers any rights under a concession prior to the beginning date of the first accounting period, this date of transfer shall be treated as the beginning and closing date of the accounting period.
1. Tax Base
The term ‘petroleum taxpayer’ covers anybody who:
A concession under petroleum law (to be obtained from Department of Mineral Resources) is required only for exploration and production of petroleum products (including crude oil, natural gas and liquid natural gas). Downstream industries including refining are not covered under Petroleum Income Tax Act. The tax is characterized by the presence of very few taxpayers.
There are 2 important amendments to the Petroleum Income Tax Act (in the years B.E. 2522 and B.E. 2532) creating 3 different versions. Each Petroleum Taxpayer is covered under one or more of the three versions (referred as status of taxpayer). Filing requirement is that taxpayer should submit one return per TIN per period per status. In case a taxpayer has to file returns under more than one status, he has to do so treating each status as a separate company. (in matters of allowances, adjusting of carried forward loss, etc.)
The important differences in tax calculation/remittance between the three versions of the Act are as follows:
All Petroleum Taxpayers are required to pay withholding tax @ 50 % on profits on transfers (transfer proceeds less loss carried forward) when petroleum property or right is transferred and if the total amount of such income is not definitely determinable.
While calculating net profit, following items are included as revenue:
The following are deductible expenses:
2. Tax Rates
Tax rate is linked to the status of taxpayer. At present, the tax rates are as follows:
Petroleum Income Tax
(b) Withholding Tax Rates
For transfer of petroleum
3. Tax Payment
Petroleum companies are required to submit their annual return within 5 months from the date of closing of their accounting period. Payment of tax has to be made at the time of filing of the return.
Return for profit remittance has to be submitted within 7 days from the date of remittance.
In addition to the annual tax payment, petroleum companies falling under status 3 are required to submit half year return (based on estimate of profit. Under this system, the petroleum company has to estimate its annual profit and pay half of the amount of tax calculated on such basis within two months after the end of first six months of its accounting period. The estimated tax payment is creditable against the annual tax liabilities of the company
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