Procedure for closing your company
July 29th, 2010
In order to close a Thai company you will normally have to contact two government authorities. The first is the Revenue Department (RD) and the other is the Ministry of Commerce (MOC).
The Revenue Department
If you are a VAT registered company, you have to apply for VAT de-registration within 15 days of the company’s closing date and return your TAX I.D along with your VAT registered certificate.
Please note that if you have any assets or inventory shown in your balance sheet as of the closing date, you will have to pay 7% VAT, as the R.D will consider them as deemed sales. For a VAT tax return, you will have to file a blank form until you have received an official letter approving the deregistration of VAT payment.
To file a corporate income tax return, you have to file the last Corporate Income Tax return (PND.50) within 150 days from the closing date
The Ministry of Commerce
You have to hold a General Meeting of the shareholders to adopt a special resolution to liquidate and dissolve the company. A liquidator and an auditor shall be appointed for such purpose and to place an advertisement in a local newspaper announcing the liquidation of the company to alert the creditors (if any). Contactable creditors will also be sent a letter by registered mail requesting them to file a claim for debts owed to them by the company. Relevant application documents together with copies of the special resolutions with MOC should be filed within fourteen days from the date of the shareholders’ meeting.
The appointed auditor must prepare and certify the financial statements (Balance Sheet and Accounts) as of the date of dissolution and hold a shareholders’ meeting to approve the financial statements for submission to the MOC.
Submit the liquidator’s report to the MOC. Once the liquidator has cleared the assets and liabilities and has called on debtors for payment of debts to the company, the liquidator must call a final meeting of the shareholders to approve the final liquidation of the company.
The minutes of the meeting should then be submitted to the MOC within fourteen days from the date of the meeting. As soon as approval from the RD is approved, the liquidator should notify and submit a copy of such approval to the MOC in order to obtain the final approval.
The above processes takes approximately one to two years to complete, depending on the number of years the company had been in operation and whether its books were properly maintained and tax returns filed as required by law, The RD will do a tax audit on your company’s VAT and Corporate Income Tax in order to make sure that you don’t have any tax liabilities left before granting an approval for liquidation.
Sirirat C. is the Managing Director of NAT, the ISO 9001:2008 certified accounting firm.