Tax Season in Thailand is going to start very soon. So, if you have already made the calculations to file your Personal Income Tax this year, you need to hold back and check once. Have you made a deduction for the shopping you did this year? If not, let us explain to you the “Shop Dee Mee Kuen” Scheme which grants Personal Income Tax deduction for purchasing goods and services in Thailand.
- What is Shop Dee Mee Kuen?
- Shop Dee Mee Kuen Program: Background
- Who will benefit from Shop Dee Mee Kuen?
- Shop Dee Mee Kuen Personal Income Tax Deduction: Scheme Details
- The Bottomline
What is Shop Dee Mee Kuen?
The Thai Cabinet gave approval to a new stimulus plan on December 20, 2022, to support the nation’s economy in 2023 as tourism will improve drastically. Please note that customers who spend money on goods and services in Thailand will be able to deduct up to THB 30,000 in taxes due to the “Shop Dee Mee Kuen” program. Additionally, note that “Shop Dee Mee Kuen” means “Shop and Payback”.
The initiative will run from January 1 through February 15, 2023. Meaningfully, it will create more than THB 56,000 million in cash flow for the nation. Furthermore, according to the estimates from the Ministry of Finance, is going to cost the Revenue Department THB 8,200 million in lost tax revenue. However, the program has the potential to increase Thailand’s GDP by 0.1-0.2% in 2023.
Shop Dee Mee Kuen Scheme: Background
To promote consumer spending in the final two months of the year, the Thai Retailers Association has suggested that the government resurrect the “Shop Dee Mee Kuen” program in November 2022.
According to Chairman Yon Pokesap, the weeks before the New Year are the perfect time to encourage people to spend. Additionally, it was noteworthy that spending has already begun to increase as a result of the relaxation of lockdown regulations.
Therefore, now was a good time to use this spending behavior of consumers for a tax deduction. Furthermore, he advised that the optimal period to introduce the program would be between November 15 and the end of December.
He said that other consumer groups would be included in the program. Additionally, this will include individuals who have signed up for previous government stimulus programs like the “Ying Chai Ying Dai” (the more you spend, the more you get) and 50:50 co-payment programs.
Note that, Yon added that the government should raise the cap on personal spending under this scheme from 30,000 to 200,000 baht. Furthermore, he estimates that this will increase annual shopping expenditures by about 400 billion baht in the final two months of the year, which could increase Thailand’s growth rate by 0.7 to 1%.
Additionally, Yon asserts that by doing this the government stands to lose 15-20 billion baht in tax revenue. But, the immediate benefits from more money moving in the economy will accelerate economic recovery. Furthermore, it will make up for the loss in tax revenue.
Who will benefit from “Shop Dee Mee Kuen”?
According to market research, customers who earn at least THB500,00 per year, or roughly THB42,000 per month, will certainly profit from the stimulus program known as “Shop Dee Mee Kuen”. Furthermore, 70% of all respondents to this research survey plan to take part in this stimulus program. However, the majority of consumers, who make less than THB 500,000 annually, do not intend to do this. It is because they continue to worry about future expenses. Furthermore, they don’t need to spend more on tax deductions because their personal income tax rates are relatively low.
Note that, the “Shop Dee Mee Kuen” stimulus campaign is to encourage customers to spend more on dining out, IT products (such as smartphones, smartwatches, and computers), and personal care items (namely shampoos, liquid soaps, and toothpaste). However, because customers frequently eat out and buy certain personal care products anyhow, such expenditure during the implementation of this effort may not increase much over a typical period (when there is no stimulus program). Furthermore, it’s expected that more young people and adults will buy IT devices. Meanwhile, the majority of customers plan to eat at restaurants and shop in malls. It is because the e-marketplace is the preferred purchasing platform for the younger generation. However, these offline channels provide a full range of goods and services.
Personal Income Tax Deduction: Scheme Details
The Mandates:
- Scheme valid on purchases made between January 1, 2023 – February 15, 2023.
- Deductions will be done only on purchases made from VAT-registered sellers.
- All purchase receipts showing the VAT Number of the seller must be preserved till filing Income Tax.
Who is Eligible for the Deduction?
All taxpayers in Thailand with an annual income of above 150,000 THB are eligible for this deduction. However, Ordinary Partnerships and non-juristic bodies are not in the scope of this income tax deduction. Please take note, that you should consult with a professional Tax Consultant in Thailand to check your eligibility.
Shop Dee Mee Kuen Slab
| Annual Income Range (in THB) | Income Tax Rate (%) | Tax Deduction (in THB) |
| 0 – 150,000 | 0 | Not Eligible for Deduction |
| 150,000 – 300,000 | 5 | Upto 1,500 |
| 300,001 – 500,000 | 10 | Upto 3,000 |
| 500,001 – 750,000 | 15 | Upto 4,500 |
| 750,001 – 1,000,000 | 20 | Upto 6,000 |
| 1,000,001 – 2,000,000 | 25 | Upto 7,500 |
| 2,000,001 – 5,000,000 | 30 | Upto 9,000 |
| Above 5,000,000 | 35 | Upto 10,500 |
Are any Goods Exempted from Shop Dee Mee Kuen Tax Deductions?
The scheme is applicable on all purchases from January 01 – February 15, 2023. However, the following expenditures do not fall in the classification to get the eligible deduction:
- Purchase of liquor, beer, wine, and tobacco products
- On the purchase of motor vehicles, motorcycles, and boats
- Purchase of newspapers and magazines
- Subscription of e- newspaper and online magazine services
- Tourism services and hotel accommodation
- Utility, water, electricity, telephone, and internet service charges
- Service fees paid for services that can be used after 15 February 2023 (e.g. club membership fees)
- Non-life insurance premiums
The Bottomline
By now, we hope that you have understood the concept of Shop Dee Mee Kuen for tax deduction thoroughly. However, it is advisable that to claim your tax rights, you must consult with an expert tax consultant. Furthermore, there are many vital factors that you must keep in mind before you pay taxes, which are, although not limited to, the following:
- Manage your accounts effectively
- Get your accounts audited
- Have updated knowledge of the tax rates, deductions, and applicable incentives
- Prepare all the documents for filing the tax
- Be Conversant with the Tax Return filing process
- Have a thorough knowledge of tax payment and return filing deadlines
There are many more small factors and considerations that are very much case-specific. Apart from the tax slab, deduction rates, and incentive figures, nothing is absolute when it comes to paying taxes. Therefore, you must have a reliable tax firm by your side in Thailand. For professional support and complete guidance along with documentation support, you can consult with Konrad Legal. Email your requirements to [email protected].
