The write-down or write-off of bad debt recognizes a receivable as uncollectible. For Corporate Income Tax (CIT) purposes in Thailand, companies can deduct bad debts if specific conditions, prescribed by Ministerial Regulation No. 186 (as amended by No. 374), are met. These conditions vary based on the amount of the debt per debtor.

General Criteria CIT Deductibility

• The debt must be a trade receivable from the company’s business.
• Must be proven genuinely uncollectible based on specific criteria.
• The write-off must follow the Revenue Department’s prescribed rules.
• Not applicable to debts between related parties unless strict conditions are met.
• The debt should have been included as revenue in prior periods.

Documentation Needed For CIT Deduction

• Evidence of reasonable collection efforts.

• Documentation depending on the amount:

For debt exceeding THB 2,000,000 per debtor, one of the following actions:
• Civil court action initiated, and court order issued, with enforcement officer confirming no assets.
• Bankruptcy action initiated, and court-approved compromise or distribution of first assets.
• Similar actions taken abroad with certified evidence.

For debt exceeding THB 200,000 but not exceeding THB 2,000,000 per debtor, one of the following actions:
• Civil court action initiated and accepted by the court.
• Bankruptcy action initiated and accepted by the court.
• Similar actions taken abroad with certified evidence.
• Internal approval for write-off must be obtained from a director/managing partner within 30 days from the accounting period end.

Debt not exceeding THB 200,000 per debtor:
• Proof that the cost of pursuing legal action would exceed the debt amount.
• Internal approval for write-off (recommended).