There are 2 types of Non-Profit organizations to be considered when establishing of non-profit organization in Thailand. The foundations or associations. In some countries, the association is well known as a federation. Here is guidance that provides you with information on basic legal including its form and nature, governing law, and tax matters.
Form and Purpose of Non-Profit Organizations in Thailand
If you are a group of individuals passionate about promoting, creating, or conducting any activity continuously such as a sport, which aims at providing opportunities and resources for people who are interested in such activity other than sharing profits or incomes earned, establishing an association would be recommended.
However, if you aim at public charity, religion, art, science, education, or other purposes for the public benefit and not for sharing profit, a foundation would be appropriate for your purpose.
Rules And Regulations Governing
There are two main Rules and Regulations governing non-profit organizations. The Civil and Commercial Code and Defines Offenses Relating To Limited Partnership, Registered Partnership, Association And Foundation Act. Those aimed at controlling the management of the Non-Profit organization and its authority director or chairman.
Keep in mind the activity of non-profit organizations and their development and management must be clean and clear as rules for admission of its members, appointment of the directors, term of office of the directors, retirement of office of the directors, meetings of the Committee, and bookkeeping.
Disobeying such a law comes with both civil and criminal liability. In case of a serious offense, the court may give an order dismissing the authority director or all committees from the office. Also, such non-profit organizations may be dissolved.
Click the link for the operation of the non-profit organization handbook (in Thai).
Payment Of Income Tax
A non-profit organization in Thailand is a juristic person as same as the other countries. When generating income, they are required to pay corporate income tax, including but not limited to submitting a foundation or association income tax return according to Por.Ngor.Dor.55 form within 150 days.
However, when the Minister of Finance has promoted and announced a foundation or an association to be a public charity or organization under Section 47(7) (KornKai) of the Revenue Code. Such non-profit organizations are exempt from taxes.
Income Of Non-Profit Organizations That Are Subject To Pay Income Tax
Income that is subject to pay income tax of a foundation or association includes income from business operations such as rent, and sale of goods and services. Also capital income such as interest and dividends, etc. Such non-profit organizations must use such income to calculate corporate income tax at the rate. required by law without deducting any expenses at all
Income Of Non-Profit Organizations That Are Exempt From Income Tax
Foundations or associations that have not been promoted and announced to be a public charity or organization as mentioned above their following incomes will be exempt from the calculation of corporate income tax:
- Registration fees or maintenance fees received from members
- Money or property received from donations
- Money or property received from a gift.
- Income from private school operations of foundations or associations which was established under the law on private schools however it does not include income from sales of goods and services. Or any other sale of services that private schools, which are vocational schools, have received from people who are not students.
Conclusion
If giving help and sharing time with others are by definition good actions, you need to remember that the law covers all parts of your life and these actions shall be construed and follow the rules and regulations of Thailand if you want to run an association or foundation here. Don’t hesitate to contact us for more details.
