Expense Timing: What Counts for Your 2025 Tax Year?

As you finalize your 2025 filing this March, a common point of confusion is "Which expenses count?" In Thailand, business accounting is based on the Accrual Principle, not just when the cash left your bank account.

In practical terms, the question for every cost is not when did we pay? but when did we receive the good or service? Your records should be built around that moment.

 

The Invoice Date Rule

If an service was provided to your company in December 2025, but you didn't pay the bill until January 2026, it still counts as a 2025 expense. Ensure your accountant has recorded these "Accrued Expenses."

 

Prepaid Expenses

Conversely, if you paid for a 12-month software subscription in December 2025, you can only claim one month (December) for the 2025 tax year. The remaining 11 months must be carried forward as "Prepaid Expenses" for your 2026 filing.

 

The Documents That Prove Timing

Three documents carry the dates that matter, and they do not always agree:

• The invoice shows when the supplier billed you.
• The delivery note or service acceptance shows when you actually received the value.
• The bank statement shows only when cash moved.

For accrual purposes, the first two dominate. Keep them filed together; an invoice stored apart from its delivery record is exactly the kind of gap an auditor asks about.

 

Why Accuracy Matters

Recording expenses in the wrong year can trigger an audit. The Revenue Department looks for mid-year vs. year-end spikes in spending. Being precise with your timing shows the authorities that your internal controls are strong, which reduces your overall audit risk. If your review uncovers an expense booked in the wrong year, raise it before filing rather than after. Adjusting an entry during preparation is routine; adjusting a filed return is not.

 

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