Creative Accounting is common?

[creative1000]

Trying to learn about Thai Business accounting and searched through public thai company database on the official DBD website.

 

I looked up many of my favorite local businesses and noticed many of them, according to the accounting records, were reporting losses for over 10 years. However, it’s obvious the owners are making a profit and quite wealthy, especially when they park outside in their new high end Mercedes and open up several branches. This wasn’t just 1 business, at least 2 dozen successful companies I looked up had either reported losses or a very tiny profit.

 

Accounting here must be a giant grey area. How are they reporting losses, but still making a sizeable income? ????

[dabhand]

Maybe they are following the Amazon business model. Losses for the initial 10 years or so, then once the opposition has been smoked out, the profits start rolling in.

 

Of course, some hefty up front financing is needed as part of that business plan. In Thailand the source such financing tends to be well hidden. 

[worgeordie]

They use e 2+2 =3 system,the poor pay little or no tax as

they don't earn enough, the rich and connected don't pay

their full share as they have ways of cooking the books,

while the middle class are paying their taxes as they really

don't have a way to fiddle anything

regards worgeordie

[Raphus]

As an accounting and finance graduate, and someone who has worked in the finance industry for some years in 3 different countries. I can assure you. Creative accounting is acceptable Globally, within the legal framework. Finding loopholes and bending rules are what accountants are paid for.

[Tingtong2mut]

I also have some business analysis experience, and I haven't seen too many businesses I would be envious of here. Many of the local businesses around me I am sure have wealthy families or other incomes as their businesses just dont seem to add up. I know one very nice Thai man sells (awful) coffee in a cheap charlie eatery. His rent is 8000 baht and he sells his hot coffee for around 25-35 baht. He doesnt sell milk or bubble teas...no add ons or cakes. Never appears to be busy infact I dont remember ever seeing him with a customer other than me. Just Cappucinos pretty much. He was showing me his equipment one day...4 head Italian Coffee machine and 2 high end grinders. Investvent that alone 500,000 baht. Then he has to find money for rent, electricty etc. The guy is obviously wealthy but its not coming from the 20 or 30 coffees he sells per day. Must be at least 10 restaurants I know of appear to be in the same boat. All I can think of is there must be some prestige attached to owning a business here even if its bleeding money or will never recover start up costs

[Miracle47]

As I know, Thai business doesn't work well there. I wanted to open a restaurant there. But I've changed my plans. Why no to try another country? In any way, before to make any conclusions I would recommend you to talk with high qualified accountant. I wish you succed in business. Don't forget to share your experience with us

[meechai]

On 6/24/2020 at 6:48 PM, creative1000 said:

especially when they park outside in their new high end Mercedes and open up several branches

 

Your seeing expenses & in turn those expenses offset income

 

Nothing creative about it.

Business owners all over the world try to expense everything till their tax authorities tell them something is not allowed

 

(Sorry just noticed this is an old resurrected thread)

 

Edited October 27, 2020 by meechai

[Miracle47]

As far as I know, Thai people are very polite and rarely say no. One of my friends is from Thailand. She is very pretty woman. But government is another matter. Many business needs to be permitted and corruption is not rare there. Laws change quite often. But that is only how I see it. If you are sure in your decision then I would recommend you to ask advice at https://apmaccountants.ie/ and I’m sure you’ll find answers to your questions. I work in the business sphere pretty long time yet and I know what I say. APM Accountants company always helps me find the best solution in my issues. So, I hope I could help you with my advice. I wish you to succeed in what you are doing today.