On 18 April 2011, the Revenue Department issued two notifications of relevance to Thailand’s civil unrest in 2010:
1. Notification of Director-General of Revenue Department Re: Incoming Tax (No. 204) – Regulations, Procedures and Conditions in relation to Tax Exemptions for Persons Sustaining Damages arising from the Political Unrest from 1 March 2010 to 31 May 2010.
As the name suggests, this Notification is applicable to any persons – legal or natural – who suffered material losses from the political unrest during the period from 1 March 2010 to 31 May 2010. It applies to all areas in Thailand affected by the political unrest at that time, not just within Bangkok.
The Notification is applicable to the fiscal year 2010 for natural persons and the relevant fiscal year commencing on or after 1 April 2009 for legal persons. Under the Notification, a tax exemption is granted by deduction from taxable income of an amount equal to the value of compensation or benefits that a legal or natural person has received from the government or Bangkok Metropolitan Authority in respect of damages caused by the unrest.
2. Notification of Director-General of Revenue Department Re: Incoming Tax (No. 205) – Regulations, Procedures and Conditions for Tax Exemptions in relation to Compensation of Insured Persons Sustaining Damages arising from the Political Unrest from 1 March 2010 to 31 May 2010.
This Notification is for the benefit of insurance companies and the insured. It is applicable to the fiscal year 2010 for natural persons and the relevant fiscal year commencing on or after 1 April 2009 for legal persons. Insurance companies and the insured are entitled to tax exemptions as follows:
a. Personal income tax exemptions for insured natural persons and corporate income tax exemptions for insured legal persons for compensation received insurance companies.
b. Corporate income tax exemption (by means of a “double deduction” from tax assessable income) for insurance companies on compensation paid to the insured persons.
The above exemptions are only applicable to compensation which insurance companies have made in accordance the suggestions, recommendations, and mediation and negotiation procedures of the Rights and Liberties Protection Department, Ministry of Justice.