Key takeaways
A developer's PND 51 does not start from half-year profit but from the full-year transfer plan. The estimate should build up from revenue, costs, expenses, adjustments and accumulated losses, then multiply by 20%, divide by 2 and deduct the WHT credits that can be used.
Formula
Revenue − cost of sales − expenses = accounting profit
Accounting profit ± adjustments − accumulated losses = estimated net taxable profit
Net profit × 20% ÷ 2 − usable tax credits = PND 51 payable
A typical company that is not in the group required by law to use reviewed half-year financial statements uses the estimated profit for the full year. The filing deadline is within 2 months of the last day of the first half of the accounting period. Internet filing may have a special deadline under announcements effective in that year, so check before filing.
5 groups of assumptions
1. Revenue
| Source of income | Tax recognition | What to confirm |
|---|---|---|
| Freehold transfer | Public interest entities recognise revenue on registration of transfer under Order Tor.Por. 1/1985, clause 3.7. Other companies choose a method according to the conditions. | Number of units, month of transfer and price |
| Leasehold registration | Recognised in proportion to the lease term under clause 3.4 or the relevant orders | Registration date, contract term and renewal conditions |
| Units held by the company | No sales revenue until sold; room revenue is recognised when the service is provided | Sales and leasing plan |
| Rental pool and services | By the period in which the service is provided | Proportion of rooms in the pool |
| Other income | Accrual basis | Interest and credit charges |
2. Cost of sales
Total project cost is divided into groups such as land, design, construction, project labour, site overheads, borrowing costs and common utilities, then allocated by saleable area.
- Freehold: expensed as cost of sales in the year the revenue is recognised
- Leasehold: allocated over the contract term or by a consistent method
- Units held by the company: classified according to intent and evidence
The rules for expensing borrowing costs and project labour must state clearly when capitalisation into the project stops.
3. Expenses
Separate headcount, selling and marketing, administration and other expenses. Use growth rates by category that can be explained, and exclude labour capitalised into the project to avoid double counting.
4. Adjustments
Permanent add-backs
- Tax borne on behalf of others, subject to conditions
- Penalties and surcharges
- Expenditure where the recipient cannot be identified
- Excess donations
- Excess entertainment expenses
Timing differences
- Commission held in the accounts as a contract cost
- Revenue where the delivery date differs from the registration date
- Depreciation above the tax rate
5. Accumulated losses
Losses can be carried forward for no more than 5 accounting periods. Use the oldest first, and prepare a loss ageing table to see which batch will expire.
PND 51 template
| # | Line | Formula | Information provider |
|---|---|---|---|
| 1 | Freehold revenue | Units transferred × transfer price | Sales department |
| 2 | Leasehold revenue | Advance rent in proportion to time | Sales department |
| 3 | Other income | Interest, services | Finance |
| 4 | Cost of sales | Cost per sq m × area | Project team and QS |
| 5 | Operating costs | Budget, less capitalised labour | Account |
| 6 | Adjustment | Add back disallowable expenses ± differences | Account |
| 7 | Accumulated losses | Not exceeding profit; use the oldest first | Account |
| 8 | Half-year tax | (1+2+3−4−5±6−7) × 20% ÷ 2 | Account |
| 9 | Tax credits | 1% WHT and other credits that can be used | Account |
| PND 51 payable | 8 − 9; if negative, handle according to entitlement |
Key risks
| Risk | Impact | Control |
|---|---|---|
| Profit underestimated by more than 25% | Surcharge of 20% of the underpaid tax under Section 67 ter | Use confirmed transfer dates and keep the evidence |
| 1% WHT credits pending refund | Cash is tied up when CIT is low | Include in the cash plan |
| Overseas commission on a net basis | WHT of 15% and VAT of 7% make the cost about 26% higher than the contract amount if they cannot be used | Check DTA and contractual obligations |
| Leasehold renewal conditions | Advance revenue overcounted | Separate the accounts by contract period |
Commission of THB 100 on a net basis: pre-tax income 100 ÷ 0.85 = THB 117.65; VAT at 7% = THB 8.24; total THB 125.89
Work steps
- Q4 of the prior year: confirm the transfer plan and prices
- Before closing the books: prepare cost per sq m
- After closing the books: confirm the tax loss against PND 50
- Before filing: review against actual first-half results and the second-half plan
This document is a general framework. The conditions for public companies, specific businesses, BOI and leasehold contracts must be checked against the facts and current law.