The tax season is arriving soon in Thailand! It is very natural that as seasoned businessmen or professionals, you must be aware of the protocols and the regulations governing the taxation norms. But, still, you may have missed out on a few latest announcements. This article intends to update you on these announcements so that it becomes convenient for you to decide the taxable income or income tax payable from your end. If you or your firm has the support of any reliable law firm in Thailand, then you may not need to worry about paying tax in Thailand in 2022.
However, this article must hold your attention if you are serious about the taxation policies of Thailand. Be it your Corporate Income Tax or Personal Income Tax Filing in Thailand, irrespective of the fact whether you are a Thai or an Expat in Thailand, you must know about the announcements made.
Extension of Tax Measures for Donations to Support Personnel Development for “Industry 4.0”
A Royal Decree (No. 737) dated 30 November 2021 extends the additional corporate income tax deduction of 200%. It is for a total deduction of 300% for certain qualifying donations made by a company or juristic partnership. Additionally, it includes the company or juristic partnership’s exemptions from Corporate Income Tax, VAT, specific business tax, and stamp duty for such donations.
Donations of machinery, components, parts, devices, equipment, or computer software for connecting machinery to an automation system made to a Personnel Development Center. It is applicable for Industry 4.0 of a government educational institution, a private higher educational institution, or a private school. However, these educational organizations must be complying with the Thai law on private institutions of higher education or private schools. All of them are eligible for an additional tax deduction and exemption.
The additional tax deductions and exemptions were originally available for donations made up to December 31, 2020. But, now there are retroactive extensions on donations between January 1, 2021, and December 31, 2022. This is in accordance with the Director-General of the Revenue Department’s rules, procedures, and conditions.
Extension of Tax Incentive for Investments in Automation Systems
A Royal Decree (No. 738) dated 30 November 2021 extends a tax benefit for automation system investments that was set to expire on December 31, 2020, retroactively. The decree allows a corporation or a juristic partnership to deduct an additional 100%.
This extension is applicable for a total deduction of 200% of capital expenditures for investments in automation systems. Additionally, this includes machinery and computer software for connecting machinery to an automation system. However, this excludes amounts paid for repairs to keep such assets in their current condition from January 1, 2021 to December 31, 2021.
Extension of Tax Incentive for Employment of Highly-skilled Personnel
A Royal Decree (No. 739) issued 30 November 2021 extends a tax benefit for the employment of certain highly skilled individuals that was set to expire on December 31, 2020. From 1 January 2021 to 31 December 2022, the decree provides a company or juristic partnership with an additional corporate income tax deduction of 50%. It is applicable for a total deduction of 150% for expenses for the payment of salaries. However, this is not applicable for salaries exceeding THB 100,000 per month. Such high salaries are for certain highly skilled personnel in the fields of science, technology, engineering, or mathematics.
Extension of Tax Incentive for Employee Development
A Royal Decree (No. 740) dated 30 November 2021 extends a tax benefit for employee development that was set to expire on December 31, 2020, retroactively. The decree allows a firm or legal partnership to deduct an additional 150%. This is applicable for a total deduction of 250% in corporate income tax for expenses in sending personnel to training courses.
Moreover, the extension is also applicable on expenses for conducting employee training programmes with approval of competent authorities. The deduction is available for expenses between January 1, 2021, and December 31, 2022. Mark that all these extensions are subject to the Director-General of the Revenue Department’s rules, procedures, and restrictions.
Tax incentive provided to encourage donations in support of public health
Individuals, companies, and juristic partnerships can receive a 100% income tax deduction for donations (in cash or in property). Moreover, these donations must be in support of public health in favour of the Siriraj Foundation or the Chulabhorn Foundation. Furthermore, the donations must be via the e-Donation system from 30 November 2021 to 31 December 2022. All these protocols are according to a royal decree (No. 741) of 4 December 2021.
Individuals, companies, and juristic partnerships are also exempt from paying income tax in Thailand, VAT, specific business tax, and stamp duty on income derived from a transfer of property or a sale of goods, or on the execution of an instrument, in connection with such donations, if they follow the rules, procedures, and conditions set out by the Director-General of the Revenue Department.
The Bottomline
You must have been able to understand from the above announcements that the Royal Thai Government is keen in promoting the Industry 4.0 module. Along with that, it intends to develop the quality of manpower, health and hygiene of the nation. We should not forget that Thailand is one of those few nations who recovered rapidly from the COVID-19 crisis. Initiatives like such announcements are reasons behind the same.
If you are now able to understand the new implementations in paying tax in Thailand, then we are very happy. If you need further help, we would be happier to do so by communicating with you. You may book a free round of consultation with us. Also, you may email us your enquiry related to taxation in Thailand at [email protected].
