When people look up Thai corporate tax, most only see “the standard rate is 20%” and never work out whether their company might qualify for the lower small and medium-sized enterprise (SME) rate. You may already know that CIT taxes company profit and the standard rate is 20%, but the real sticking point is: does your company actually count as an SME, and which bracket does your profit fall into? On top of that, accountants often only report one total tax figure without breaking down how each bracket is calculated, making it hard to do a conservative tax estimate for a budget or business plan.
This article does one thing: it lets you use a few numbers and conditions to quickly work out what percentage you’ll actually be taxed at.
Start With the Direct Answer: Which Bracket You’re Likely In
The standard corporate income tax rate for ordinary Thai companies is 20%; as long as a company doesn’t meet the SME conditions, all of its profit is taxed at this rate.
If a company’s size falls within the “small-scale” range and meets the official definition, it can use the SME tiered rate.
Basic SME conditions (both must be met):
- Paid-up capital at the end of the accounting period does not exceed THB 5 million
- Annual sales and service revenue does not exceed THB 30 million
Another precondition: the SME tiered rate only applies to companies incorporated under Thai law. A branch of a foreign company operating in Thailand generally does not qualify and is taxed directly at 20%. If what you’ve set up is a branch rather than a subsidiary, this discussion of the SME rate does not apply to you.
When SME conditions are met, taxable net profit is taxed in three tiers:
- THB 0–300,000: 0% (exempt)
- THB 300,001–3,000,000: 15%
- The portion above THB 3,000,000: 20%
SME status does not mean “15% on the whole amount” — it’s calculated using a tiered ladder. Only the middle band of profit is actually taxed at 15%; the top tier is still 20%.
Practical Checklist: Check These Numbers First
1. Confirm Whether Your Company Could Qualify as an SME
Confirm these two numbers with your accountant, registration advisor or lawyer:
“What is our current paid-up capital? Is it above or below THB 5 million on the books?”
“Did our total sales and service revenue last year exceed THB 30 million?”
If either capital or revenue exceeds the threshold, don’t estimate your tax as an SME — use 20% to estimate the overall CIT instead. Special incentives such as BOI are a separate path and outside the scope of this article.
2. Confirm That “Profit” Means Taxable Net Profit for Tax Purposes
“Which figure are you using to calculate CIT? Is it the net profit after tax adjustments?”
Only once everyone agrees they’re talking about the same “taxable net profit” can you plug that number into the tiered rates to estimate tax.
3. Map Your Taxable Net Profit Against the Rate Ladder
Once you have the taxable net profit, check it against this:
- Net profit at or below THB 300,000: CIT is theoretically close to zero, but you still need to file on time.
- Net profit between THB 300,000 and 3,000,000: the first THB 300,000 is exempt, and the portion above that is taxed at 15%.
- Net profit above THB 3,000,000: the first THB 300,000 is exempt, the THB 300,000–3,000,000 band is taxed at 15%, and the portion above THB 3,000,000 is taxed at 20%.
If your company doesn’t meet the SME conditions from the outset, or is a foreign branch, skip all of the above and simply multiply your total taxable net profit by 20%.
Note: large multinational groups have a separate set of rules. From 1 January 2025, Thailand applies a 15% global minimum tax (Pillar Two) to multinational groups with global consolidated revenue exceeding EUR 750 million. This regime is entirely separate from the SME rate; if your group meets this scale threshold, it should be assessed separately.
Things to Watch Out For
“Small companies usually count as SMEs, don’t worry about it.” This statement doesn’t mention the capital and revenue thresholds, which suggests no one has checked against the official definition or confirmed whether the entity is a Thai corporate body rather than a branch.
“Just use 15% as a rough estimate.” This ignores the fact that the SME rate is tiered and part of the profit is still taxed at 20% — it can easily lead you to underestimate your tax burden.
“It’s fine to pump up the capital a bit for now, revenue is what matters.” Once capital exceeds THB 5 million, SME status is lost for that year immediately, and reducing capital afterward may not necessarily fix it — assess the impact on the tax rate together with any capital increase before you do it.
“In practice, the tax authority won’t check this closely.” The rate is a clear statutory condition, not something open to negotiation. If you hear this kind of statement, ask for the specific legal provision it’s based on, rather than accepting “that’s how the industry does it.”
What to Decide Next
When You Can Move to the Next Step
- You’ve confirmed both paid-up capital and annual revenue are within the SME thresholds, and the company is a legal entity incorporated under Thai law.
- Your accountant is willing to walk through an actual calculation with real numbers, applying the tiered rate to your company’s estimated net profit for the year.
- They can explain how the rate would change if future revenue exceeds THB 30 million or capital is increased beyond THB 5 million.
Under these conditions, you can use the SME tiered rate for a conservative estimate, while assuming you may revert to the full 20% rate at some point in the future.
When You Should Stop and Check First
- You’re planning a capital increase or bringing in new shareholders that could push capital above THB 5 million, but haven’t run a tax-rate recalculation yet.
- Company revenue is approaching THB 30 million, but internal budgets and contract pricing still treat the SME rate as fixed for the long term.
- The business model has a high international component (e.g., entities in multiple countries at once), but your advisor answers with just one simple rate, without addressing permanent establishment and the actual scope of taxation.
FAQ
Q: We qualify as an SME this year — what happens if revenue exceeds THB 30 million next year?
SME status is judged year by year based on each accounting period’s conditions. As soon as capital or revenue exceeds the threshold in a given year, that year no longer uses the SME tiered rate and is instead taxed at the general 20% company rate. The tax burden can rise noticeably the following year, so factor the scenario of “jumping from SME to the general rate” into your cash-flow planning.
Q: We set the company up with very low capital and plan to increase it later — will that affect our SME status?
Yes. The SME condition looks at paid-up capital as of the end of the accounting period, not just at the time of incorporation. If a later capital increase pushes the total above THB 5 million, that period may no longer qualify for SME status, even if the actual scale of operations remains small. Every capital increase should be assessed not just for its effect on equity structure, but also for its impact on the CIT rate.
Q: We had a loss this year — do we still need to care about the SME rate?
A year with a loss has no taxable net profit, so there’s naturally no CIT actually payable — but you should still confirm whether the company falls within the SME range. As soon as the company turns profitable, the rate is immediately affected by the capital and revenue conditions; and some tax incentives or policies may be designed specifically for SMEs. Knowing which side of the line you’re on ahead of time helps you estimate actual net profit once you cross into profitability.
For case-specific numbers, work through the calculation with your accountant; for general questions about how the system works, ask Zagdim.
Disclaimer
This article focuses only on “the CIT rate and thresholds for ordinary companies vs. SMEs,” to help you quickly gauge roughly what percentage you’ll be taxed at — it is not a complete guide to Thai tax and company law. Actual tax liability is still affected by accounting adjustments, special incentives, international structures and the latest regulations; before making important decisions, follow the latest guidance from Thailand’s Revenue Department and a qualified professional advisor.
Have a question about this guide? Leave a comment below, or ask Zagdim directly.
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Sources
- Thailand Revenue Department – Corporate Income Tax
- Thailand Revenue Department – Tax for SMEs
- PwC Thailand – Thailand Tax 2024/25 Booklet
- Forvis Mazars Thailand – Corporate Income Tax in Thailand
- Statrys – Corporate Tax Rate in Thailand: What You Need to Know in 2026
