1. Accounting (Source: Keiei Zaimu Magazine)
In Thailand’s job market, accountants have been in high demand and recruited with favorable conditions. In the country companies are required of having their financial statements audited by accountants, and this is a must for tax filing. It means companies cannot file a tax return until accountants complete the audit. If a tax return cannot be filed by the deadline, penalty and interest is imposed. Also, companies’ financial statements should be prepared by accountants and no statements without their signs can be accepted by the Ministry of Commerce. While accountants owe such great authorities, they bear a risk of lawsuit if investors suffer from material misstatements in the financial statements. To be qualified as an accountant, one should complete accounting major, be a resident of Thailand with Thai fluency, and be registered on the Ministry of Commerce.
2. Labor Management（Year-end Tax Adjustment）
【What is Year-end tax adjustment?】Income Tax Act (No. 190 – 193)
Year-end tax adjustment is a process to calculate the total tax payable on one’s annual income (income earned between January and December), and compare it with the total of what has been deducted and withheld from his/her salary each month. If the total amount of deductions to date exceeds the final tax payable, the employee will be entitled to a refund. On the other hand, if such deductions fall short of the final amount, the employee has to pay the outstanding balance. In principle, income tax is calculated based on the employees’ status as of December 31st. That is why the process is conducted at the end of the year, and called “year-end tax adjustment”.
【Why is Year-end tax adjustment necessary when income tax is withheld from salary each month?】
In most cases, the total of what has been withheld and the final amount do not agree with each other due to a variety of reasons, including the following cases:
(1) The withholding tax rate table is based on the assumption that base salary remains unchanged throughout the year, but actual salary amount often changes during the year.
(2) In monthly payroll calculation, changes in withholding amount due to changes in the number of dependents during the year are only effective from the months in which the changes occurred, and no retroactive amendments are made to the amounts withheld before those months.
(3) Income deductions for life insurance premiums, etc. are not at all taken into account when calculating monthly withholding amounts.
In short, the amount of income tax withheld each month is calculated on a “pro-forma” basis, and therefore, needs to be “settled” through re-calculation at the end of the year.
【Person who is/is not subject to Year-end tax adjustment】
Basically, any person who is paid by an employer and is employed when year-end tax adjustment is conducted is subject to year-end tax adjustment. However, in order to be eligible for the adjustment, an employee must submit “Declaration of Income Deduction for Dependents, Spouse, Handicapped, etc.” to the employer by the date when year-end tax adjustment is conducted. As an exception, employees who are transferred overseas or who have died during the year may have year-end tax adjustment as soon as their status is confirmed.
On the other hand, an employee is not subject to year-end tax adjustment if any of the following conditions applies:
(1) An employee’s annual employment income exceeds 20 million yen.
(2) An employee has income from two or more employers, and did not submit “Declaration of Income Deduction for Dependents, Spouse, Handicapped, etc.”
(3) An employee is granted tax deferral under the Act on Reduction or Release, Deferment of Collection and Other Measures Related to Tax Imposed on Disaster Victims.
Those employees need to file their final tax return individually.
【What happens if you forgot to declare deductions?】
If you failed to report to your employer the amounts of insurance premiums, etc. which you paid during the year and, as a result, such amounts were not taken into account for income deduction by year-end tax adjustment, you may claim for a tax refund by filing your final tax return.
【Amendment to “Life Insurance Premium Tax Deduction Scheme”】
“Life insurance premium tax deduction scheme” has been amended. The changes are effective for all insurance contracts concluded on or after January 1st, 2012.
Below is the summary of amendments:
(1) Creation of new category: “Long-term care and medical insurance premium tax deduction Scheme”
(2) Change in tax-deductible limit for each insurance premium
(3) Change in total tax-deductible limit
If you have any questions, please feel free to contact our HR Consulting Group.