Restaurant Opening Taxes for Beginners! Manage Finances and Accounting to Perfection, Short and Easy-to-Understand Summary
Many newcomers to opening a restaurant may think about the restaurant’s operating system, making the recipe perfectly delicious, and just wanting it to sell well and have customers come back first. The importance of “taxes” is the last thing that many people think about.
Today, MHA summarizes the taxes for new restaurant owners. What are these taxes? What documents do you need to keep as evidence? How much money do you need to prepare? How do you do your accounting? What do you need to register? Let new entrepreneurs prepare for taxes from the beginning of the year. Manage finances and accounting perfectly!
This tax is levied on individuals who have annual income. It is based on the income that occurs during the year. Income earners are required to show the income on the prescribed tax return form. By law, income from opening a restaurant is considered income type 8, which means that taxes must be filed every half year.
- 1st time: Submit Form Por.Ngor.Dor.94 within July-September, calculated from the total income in January-June.
- 2nd time: Submit Form Por.Ngor.Dor.90 within March of the following year, calculated from the total amount throughout January-December, by deducting the tax paid in the first time from the tax calculated in the second time.
If we open a restaurant without registering a legal entity, we have to calculate the income from sales to pay personal income tax every year.
In filing this type of tax, you must prepare evidence of income and expenses, including receipts, to be submitted as evidence for actual tax deductions. Or you can choose to use a fixed-rate deduction of no more than 60% if you don't want the hassle of collecting and filing a large number of documents.
The person who is responsible for paying this tax is a company or a juristic partnership registered under the Civil and Commercial Code, and includes other juristic persons that are not registered under the Civil and Commercial Code. This means that if we open a restaurant by registering as a company, a partnership, a joint venture, or a group of persons, we must pay this tax. It is different from personal income tax in that corporate income tax uses the accounting period to calculate and determines the time for filing taxes, which can start at the beginning and end at any time. The tax amount is calculated from net profit multiplied by the specified tax rate.
Restaurants that are required to pay corporate income tax must also submit tax forms twice a year:
- The first time, Form Por.Ngor.Dor.51 is called the half-period income tax, filed within 2 months after the 6-month accounting period has passed.
- The second time, Form Por.Ngor.Dor.50 is called the end-of-year income tax, filed within 150 days from the last day of the accounting period.
To file this type of tax, you must prepare evidence of company expenses, withholding tax forms, etc. to be used for deductions.
It is a tax collected from the sale of goods or services at each stage of production and distribution of goods or services, both domestically produced and imported from abroad. Normally, VAT is collected at a rate of 7%, which is added to the price of the goods. That is, if we register for VAT, we will have to increase the price of food to cover the VAT as well. Because we must not forget that when we buy raw materials, we also pay VAT to the supplier.
- Being a business operator with an income exceeding 1,800,000 baht (before deducting expenses) and must submit registration within 30 days from the date of income exceeding
- Being a business operator selling products or providing services, having to purchase products or receive services that are subject to VAT, such as installing machinery, constructing office buildings, and constructing factories, you can submit a registration application within 6 months before the date of starting business or
- Being a business operator who imports products from abroad
Entrepreneurs must request receipts from suppliers to keep and report purchase tax, including issuing tax invoices to customers and reporting sales tax to be used in calculating taxes each month because they must submit VAT on a monthly basis by submitting Form Por.Por. 30 every month by the 15th of the following month, regardless of whether there are sales or not.
It is a pre-tax collection that requires the payer to withhold tax from the money paid to the recipient every time the payment is made. The tax deduction must be in accordance with the specified criteria, methods and conditions. After that, the money must be sent to the Revenue Department. shutterstock_538323685.jpg265.82 KB
Money that must be withheld from tax at source includes rent, wages, wages for making products, prizes from lottery, advertising costs, transportation costs, service costs, dividends. In the case that our shop has employees, we must withhold tax at source if the employees earn more than 26,000 baht per month to submit to the Revenue Department by the 7th day of the following month.
It is a tax collected from signs that display names, brands or symbols used in business or other activities to generate income or advertise business, as we see on tall buildings, streets and digital signs that can move. shutterstock_1770865601.jpg238.16 KB
- Characteristics of signs subject to tax include name signs, brands, logos consisting of letters, images, regardless of size.
- Characteristics of signs that are exempt from tax include signs attached to buildings, signs with wheels (the sign must be moved in and out), signs for occasional events, government signs, signs of both public and private schools, temple signs, association signs, foundation signs, signs attached or displayed on personal cars, motorcycles, road rollers, or tractors, signs installed or displayed on vehicles with an area not exceeding 500 sq. cm.
Sign tax rate
- Signs with only Thai characters and messages that can move or change to other messages, the tax rate is 10 baht per 500 sq.cm. If it is a sign other than this, the tax rate is 5 baht per 500 sq.cm.
- Signs with text in Thai mixed with foreign text and/or mixed with images and/or other symbols, signs with text, symbols or images that move or change to other text, symbols or images, the sign tax rate is 52 baht per 500 sq. cm. Outside of this, the sign tax rate is 26 baht per 500 sq. cm.
- Signs that do not contain Thai characters, regardless of whether or not they have any pictures or symbols, and signs that have some or all of the Thai characters under or below foreign characters, signs that have text, symbols or images that move or change to other text, symbols or images, the sign tax rate is 52 baht per 500 sq. cm. Outside of this, the sign tax rate is 26 baht per 500 sq. cm. shutterstock_1553540318 (2).jpg294.5 KB
If a new sign is installed or the message is changed, Form Por Por 1 must be submitted within 15 days and the annual sign tax must be paid within March at the district office, municipality, or local administrative organization where the sign is installed.
It is a tax collected by local authorities, dividing land into groups, where restaurants are considered commercial and industrial land, i.e. commercial, industrial, office buildings, hotels, restaurants, and others. The highest tax ceiling is 1.2%, but the current tax rate is maintained at 0.3-0.7%, with the following details:
- Land valued at 0 – 50 million baht, rate 0.3% or 3,000 baht per million.
- Land valued at 50 – 200 million baht, rate 0.4% or 4,000 baht per million.
- Land valued at 200 - 1,000 million baht, rate 0.5% or 5,000 baht per million.
- Land valued at 1,000 – 5,000 million baht, rate 0.6% or 6,000 baht per million.
- Land valued at 5,000 million baht or more, rate 0.7% or 7,000 baht per million.
If we own the land where the restaurant is located, we must also pay this tax. Normally, there will be a letter announcing the appraisal of the land and buildings, along with a notice to pay to the local government organization where the land is located.
If our shop has imported materials, equipment, raw materials, machinery that are on the import tax list, we must also pay customs duties. The tax rates for each type of imported goods are not the same. Therefore, we must study customs procedures and tax rates to understand them before importing shop materials and equipment from abroad.
