Newly established business entities can choose a date for the initial accounting period. After that, accounts must be closed every twelve months.
If an entity wants to change its accounting period, it must obtain written approval from the Commercial Registration Department and the Revenue Department.
The Accounts Act 2000 regulates the rules regarding accounting of accounts and supporting documents.
The law also stipulates qualifications from bookkeepers, who must be Thai residents, proficient in Thai, and graduates from vocational high schools or universities with a minimum Bachelor of Accounting degree.
The Civil and Commercial Code also provides general rules about accounts that must be maintained.
Recording accounting entries can be done in English, but a Thai translation must be added. All accounting entries must be written in ink, typed or printed. The computerized accounting system should be registered with the Department of Commerce and the Department of Revenue.
In general, the accounting principles promulgated in International Financial Reporting Standards are followed in Thailand. In addition, accounting methods and conventions approved by law are considered as generally accepted accounting practices. The Accounting Professional Federation is an authoritative body that promotes the application of generally accepted accounting principles.
Certain accounting principles, adopted by business entities, must be followed consistently and can be changed only with the approval of the Revenue Department. The accounting principles include depreciation, compulsory reserves, shares, dividends, consolidation, expenses paid from net income and accounting for pension plans.
All business entities including companies, partnerships, branch offices, representative offices and joint ventures are required to prepare an annual income statement and balance sheet, and audit it. The auditor’s report must state whether the account has been properly prepared in accordance with the Accounting Regulations and whether this provides a true and fair view.
Appointment of Auditors
Every business company is required to appoint an independent auditor who is registered as a Certified Public Accountant in Thailand. Certified Public Accountants registered and issued with a license by the Department of Commerce.
The auditor is appointed at the Annual General Meeting of Shareholders (GMS) to serve until the next GMS. The GMS is also required to regulate Auditor remuneration. Although the auditor must be independent, the Civil and Commercial Code allows the company to appoint a shareholder as an Auditor if he has the required qualifications.
All business entities are required to submit a set of audited financial statements, together with the annual tax return and the director / manager’s report with the Revenue Department within 150 days after the end of their financial year.
Companies, partnerships and branches of foreign companies are required to submit two sets of audited financial statements and statutory annual returns with the Company Registration Department within five months of the end of their financial year. The company is also required to submit references to the GMS that approve the financial statements and a copy of the company’s shareholder list on the date of the GMS. Failure to meet this requirement can result in fines of up to 70,000 Baht.