Filing Financial Statements: A Simple Guide for Thai Entrepreneurs

Running a successful and growing business involves many details that require our attention. One crucial aspect that should not be overlooked is "filing financial statements." Although accounting and finance might seem complex and daunting for those without a background in these fields, filing financial statements is a legal obligation that every entrepreneur must fulfill. The process is easier than many think. This article aims to help all entrepreneurs understand the meaning, importance, deadlines, filing channels, and precautions related to filing financial statements in Thailand, enabling you to carry out this task correctly.

What is filing financial statements?

Filing financial statements refers to reporting a company's operational results and financial status to government agencies. It is akin to an annual health check-up for a business. According to the Accounting Act B.E. 2543, companies or businesses must submit their financial statements to the Department of Business Development annually, regardless of whether they have made a profit, loss, or even if they have not yet commenced operations.

Emphasizing this point is crucial as new entrepreneurs or companies that have not yet engaged in business activities might think it's unnecessary to file financial statements, which is a misunderstanding and could lead to future problems.

Why Filing Financial Statements is Important

Filing financial statements is crucial for businesses. It is not only a legal duty but also a crucial tool that helps entrepreneurs understand the condition of their business better.

Financial statements help determine whether the business has truly made a profit or suffered a loss over a given period. This information is critical for planning and decision-making related to business operations, such as considering expansion, improving management, or evaluating potential risks. Additionally, financial statements are akin to an annual health check-up for the company, providing insight into the financial status, strength, and future trends of the business. This information is not only significant to the entrepreneurs themselves but also to other stakeholders, such as shareholders who use this data to evaluate the management's performance, creditors who consider the company's ability to repay debt, and investors who might be interested in investing in the business.

Importantly, filing financial statements is also a legal requirement, making it necessary for government agencies like the Department of Business Development and the Revenue Department to know the financial status of the business. This information is essential for overseeing and developing the country's overall economy. Thus, giving importance to the accurate and timely preparation and filing of financial statements is something entrepreneurs should not overlook.

When should you start filing financial statements?

For newly registered companies, it is crucial to start the process of "filing financial statements" from the first accounting period. The first accounting period can be chosen with a duration of no more than 12 months from the date of registration. However, the subsequent accounting periods must always be 12 months long. Many companies choose to close their accounts at the end of the calendar year, on December 31st, for convenience in managing tax documents.

According to the law, a limited company must present its audited financial statements to the shareholders' meeting for approval within 4 months from the end of the accounting period. The financial statements must then be submitted to the registrar within 1 month from the date they were approved by the shareholders' meeting. Failure to hold a meeting to approve the financial statements within the specified period may result in legal penalties.

Key deadlines for filing financial statements annually (for companies with an accounting period ending on December 31st) include the following steps.

Step	Deadline
Hold a shareholders' meeting to approve the financial statements	By April 30th of the following year (4 months after the end of the accounting period)
Submit Form Bor.Jor.5 (list of shareholders)	Within 14 days after the meeting
Submit financial statements to the Department of Business Development	By May 31st of the following year (1 month after approval from the meeting, but not more than 5 months after the end of the accounting period)
Submit Form PND.50 (corporate income tax return)	Within 150 days after the end of the accounting period

If a company wishes to change its accounting period, it can request approval from the Department of Business Development and the Revenue Department.

What happens if a company never submits financial statements?

Neglecting to submit financial statements for a new company can lead to significant legal repercussions. Initially, the company or business that fails to submit financial statements will receive a warning letter from the Department of Business Development. This letter will include essential information regarding the requirement to submit financial documents or statements. If the company ignores this letter, the Department of Business Development may refer the case to the police to summon the directors, impose fines, and require financial statement submission.

Beyond the initial legal consequences, failing to submit financial statements can lead to further penalties, including criminal charges. If the company continuously fails to submit financial statements for an extended period (e.g., three years), there is a high risk that the Department of Business Development will suspend the company’s registration or, in the worst-case scenario, revoke the company’s registration. This would result in the company losing its legal entity status and being unable to conduct business legally.

Furthermore, failing to submit financial statements undermines the company's credibility in the eyes of customers, business partners, and financial institutions. This can lead to difficulties in securing bank loans or negotiating business deals, making it more challenging for the company to operate smoothly. Therefore, consistently submitting financial statements is crucial for every business owner to maintain legal compliance and business reputation.

Fines for Late Submission of Financial Statements

If a company submits its financial statements late, it will be subject to fines from both the Department of Business Development and the Revenue Department. The fines vary based on the length of the delay and the type of legal entity.

Fines from the Department of Business Development are divided into two main categories:

1. If the approval meeting is not held within four months after the end of the accounting period, the company and authorized directors are each fined 6,000 baht.

2. If the approval meeting is held on time, but the financial statements are submitted late, the fines are as follows:

Late by no more than two months: Each accountant and director is fined 1,000 baht, totaling 2,000 baht for a limited company.
Late by more than two months but not more than four months: Each accountant and director is fined 4,000 baht, totaling 8,000 baht for a limited company.
Late by more than four months or not submitted at all: Each accountant and director is fined 6,000 baht, totaling 12,000 baht for a limited company.

In addition to fines from the Department of Business Development, there are also fines from the Revenue Department related to the late submission of Form PND.50 (corporate income tax return). Generally, there is a fine for late submission, which can be up to 2,000 baht. If there is any tax due, there may be an additional interest charge of 1.5% per month on the outstanding tax amount.

To provide business owners with a clearer overview of the fines from the Department of Business Development, a summary is shown in the table below.

Type of Legal Entity	Late by no more than 2 months (THB)	Late by more than 2 but not more than 4 months (THB)	Late by more than 4 months or not submitted (THB)
Registered Partnership	2,000	8,000	12,000
Limited Company	2,000	8,000	12,000
Joint Venture	2,000	24,000	36,000
Foreign Legal Entity	4,000	48,000	72,000
Public Limited Company	4,000	48,000	72,000

Who to Submit Financial Statements

Entrepreneurs who need to submit their financial statements can do so through two main channels

Electronic Channel (DBD e-Filing): The Department of Business Development recommends using this channel because it is convenient, fast, and available 24/7 through the website www.dbd.go.th. To submit financial statements via the DBD e-Filing system, entrepreneurs must register for a Username and Password. Once registered, they can log into the system, fill in the financial statement details (which may require the DBD XBRL in Excel program), and upload the relevant documents.
Offline Channel: Entrepreneurs can submit their financial statements in person at the Department of Business Development (central office) or at the Business Development Office Districts 1-6 in Bangkok and provincial commerce offices throughout the country. However, for this method, the Department of Business Development may require the information to be submitted again through the DBD e-Filing system within 7 days.

For limited partnerships submitting financial statements at the Department of Business Development, they can only upload the financial statements. The auditor's report must be submitted to the Revenue Department again.

Can Financial Statements Be Corrected?

If errors are found in the submitted financial statements, they can be corrected by following these steps

For DBD e-Filing:
- Log into the system again.
- Go to "View Submission History and Print Forms/Documents."
- Select the financial statement to be corrected.
- Correct the information and request new approval.
If a clarification letter needs to be submitted: Send the clarification letter with supporting documents, such as a copy of the shareholders' meeting minutes.
For offline submissions: Contact the Department of Business Development directly to make corrections.

It is advisable to thoroughly review financial statements before submitting to reduce the complexity of the correction process.

Submitting financial statements is an essential duty for business operators in Thailand, as it reports the business performance and financial status to the government agencies. Besides complying with the law, it also aids in management and business planning. Understanding the meaning, importance, deadlines, penalties, and submission channels will help ensure correct procedures are followed and avoid potential issues.

Financial statements must be submitted annually, even if there is no business operation. Deadlines vary depending on the type of legal entity. Generally, limited companies must present financial statements to the shareholders' meeting within four months after the accounting period ends and submit them to the Department of Business Development within one month.

Delayed submissions are subject to fines from both the Department of Business Development and the Revenue Department. Submissions can be made online via the DBD e-Filing system or offline at the Department of Business Development or provincial commercial offices. If errors are found in the financial statements, they can be corrected, especially for online submissions.

If you are uncertain about the details or procedures for submitting financial statements, it is advisable to consult with an accounting expert or contact the Department of Business Development for further guidance. Alternatively, you can contact us at iAcc Professional for advice and annual financial statement submission services.