Many amateur entrepreneurs may not know that apart from knowing how to manage your business, tax is something very important and unavoidable that you must know when starting a new business. So, in this article, we are talking about business tax that you must know.
Talking about “tax” may worry you. All numbers may be running through your head. Do you have to pay taxes, or you do not? And what if you do not pay and just disappear…But do not forget that not paying tax is considered as an infraction!!
Tax is money or property that the government or institution performing the duty equivalent to the government collects from its citizens—both ordinary persons and juristic persons. This is to fund public works and services like developing the country, taking care its citizens, and preserving and maintaining peace of the country. There are 2 principal taxes: direct tax and indirect tax.
Direct tax is tax collected from an income or property of individuals or juristic persons. Additionally, it is impossible to shift the tax burden to other people. In general, examples of direct tax are as follows:
Personal income tax is collected annually, from 1 January to 31 December.
Corporate income tax is collected from companies or juristic partnerships’ income.
Other tax is, for example, signboard tax, house and building tax, local development tax, estate tax and property tax which is collected from individuals or juristic persons’ income or wealth.
Indirect tax is collected from consumers when they sell goods and services. It is possible to shift the tax burden to the consumers who bear the ultimate economic burden of the tax instead of sellers. In general, examples of indirect tax are as follows:
Value added tax is collected from ordinary persons or juristic persons whose annual income is not less than 1,800,000 baht.
Specific business tax is collected from a specific business operation in place of trade tax which was repealed, and from selling real estate. It specifies that a seller of such real estate must be its owner for at least 5 years.
Excise tax, custom duties, sales tax, and other tax service fee are collected from individuals’ expenditure which is not considered based on individuals or juristic persons’ wealth.
Many entrepreneurs may deal with tax themselves, some may think tax is so complicated that they have to hire an accounting and tax expert to help them so that there will not be any consequences. However, entrepreneurs should study more about tax themselves which is relevant to their own businesses as tax is also one of their responsibilities.
Credit: https://flowaccount.com