Amidst the COVID-19 chaos and lockdown, it is no-brainer that there’s going to be a massive economic loss worldwide. To help the SMEs cope up with the current situation, Thai Government, on March 27, 2020, issued the following tax relief measures;
- Deduction in Interest Expense
SMEs will be able to claim a 150% deduction for the interest expenses on soft loans for the first two years. 20 million baht is the maximum that an SME can receive. However, for that they will need to fulfil the below-mentioned criteria;
- Having not more than 200 employees;
- Maintaining single set of accounts;
- Having an annual revenue of not more than 500 million baht.
- Deduction in Withholding Tax
Withholding tax is to be reduced to 1.5% from April 1, 2020 until September 30,2020. This rate will be again reduced to 2% from October 1 until December 31, 2020.
For your information this would cover commissions, professional fees, and royalties. However, this incentive will only be for those who makes payment through the e-withholding tax system.
- VAT Refunds
Those businesses who participated in the Good Exporter program is eligible for VAT refunds. 30-days return will be for businesses who have filed VAT returns through e-filing system and those who have filed through papers, they will receive the refunds within 45 days.
- Salary Costs Deduction
SMEs are eligible to deduct 300% of salary costs paid to the employees from April to July 2020. They must fulfil the below-mentioned criteria;
- The salaries must not be more than 15,000 baht per month, per employee;
- The number of employees must not be more than 200;
- Employees must be insured and that must be under the national social security program;
- Annual revenue cannot not exceed 500 million baht;
- Personal and Corporate Tax Filing Date Extension
The deadline for filing of both Corporate Income Tax and Personal Tax has been extended till August 31, 2020 for accounting period ending in 2019, and September 30, 2020, for accounting period ending in 2020.
Besides, the central bank has cut its rate to 0.75%, followed by other ASEAN nations, including Philippines, and Indonesia. Government is all hopeful that this emergency policy rate cut will help in catering to the liquidity strains and will therefore accelerate debt restricting for the borrowers, particularly for the SMEs and households.
To better understand how can you or your business be benefited from these tax reliefs, you must seek an assistance of a tax advisor in Thailand.
