Tax on Partnerships

in Thailand
Reported by
Princess Joy G. Florentin
on
December 13, 2014

3 Types of Partnerships
I.
II.
III.

Ordinary (Unregistered)
Registered Ordinary
Limited

Thai National Partnerships

partnerships having 2 Thai

natural or juristic persons for
each alien partner.
can engage in practically all
forms of business.

Alien Partnerships

Partnerships which have a

foreigner as the managing
partner or as the manager; OR
foreigners investments amount
to 1/2 or more of the total capital
subject to the Foreign Business
Act.

I.

Unregistered
Ordinary
Partnerships

DEFINITION
Ordinary (Unregistered)
Partnership
consists of two or more persons
who join together for a business
purpose. The partnership
agreement does not have to be
in writing and is not publicly
registered.
considered as Joint Venture.

LIABILITY OF THE PARTNERS

All partners are liable without
limitation for any acts done by any
partner in the course of operating
the partnership. Creditors may
claim against the assets of any
partner, without first claiming
against the assets of the
partnership.

TAX ADVANTAGES OF
ORDINARY PARTNERSHIPS

they are taxed as natural

persons, but separately from
the partners.
they file income tax returns and
pay tax at the progressive
natural person rates of 10%35% with the same standard
deductions that are permitted to
individuals.
no matter how many partners
there are, may deduct two

COMMERCIAL REGISTRATION

Ordinary partnerships are liable

to apply for commercial
registration with the Ministry of
Commerce, in the same manner
as sole proprietorships.
Commercial registration does not
convert the ordinary partnership
into a registered ordinary
partnership.

II.

Registered
Ordinary
Partnerships
(ROP)

DEFINITION
Registered Ordinary
Partnership
For a partnership to be an "ROP",
the partnership agreement,
including the details of capital
contributions, management and
objects, must be in writing, and
registered with the Ministry of
Commerce.

TAX OF ROPs
ROPs are subject to the general
corporate tax rate of 20% of net
income.
Profits distributed by a ROP are
subject to taxation in the hands
of the partners.
Distributions of profits to natural
persons are subject to a
withholding tax rate of 10%, but
a tax credit is allowed.

PARTNERSHIPSS ASSETS
Where a claim is made against
ROP, a creditor must first look to
partnership assets before
looking to a partner's separate
assets.

DISADVANTAGE OF ROP
the ROP form of business
organization is not very popular,
since it offers little or no
apparent tax advantages and
little or no protection against
liability.

Limited
Partnerships
(LP)

III.

DEFINITION
Limited Partnership
a form of registered partnership
in which there are 1 or more
managing partners who
manage the business and who
are personally liable for the
partnership's debts, AND 1 or
more partners who are not
personally liable for the
partnership's debts, except for
their undelivered or withdrawn
capital contributions.

COMMERCIAL REGISTRATION

The partnership agreement,

including the details of capital
contributions, management and
objects, must be filed with the
Ministry of Commerce, in the
same manner as a registered
ordinary partnership.

LIABILITY OF THE PARTNERS

Partners with limited liability

become liable without limit,
where they actually manage or
lend their name to the
partnership.

ADVANTAGE
LPs provide an element of
limited liability with less
formalities than are required for
limited companies.

TAX OF LPs
LPs are subject to the general
corporate tax rate of 20% of net
income.

TAX FILING AND PAYMENT

Form PND 50 must be filed
within 150 days from the closing
date of their accounting periods.
Tax payment must be submitted
together with the tax returns.
Any company disposing funds
representing profits out of
Thailand is also required to pay
tax on the sum so disposed
within 7 days from the disposal
date (PND 54).

SUMMARY
Nature

Tax

Extent of
Liability

Unregistered
Ordinary
Partnership

Not a legal
(juristic) entity

PIT
(10% - 35%)

All partners
are liable

ROP

Legal entity

CIT
(20%)

Partnership
assets before
partner's
separate
assets.

LLP

Legal entity

CIT
(20%)

Managing
partners are
liable without
limit

References
The Thailand Business and Legal Guide
(retrieved from
http://www.bia.co.th/008.html)
http://www.rd.co.ths
http://www.jurists.co.jp/en/publication/tra
ctate/docs/101014_Thailand_E.pdf