To lessen the impact of COVID-19 crisis, several measures have been introduced by the Thai Government to aid employees, workers, entrepreneurs, companies and other affected sectors. Among other things, tax relief measures have been released which can be summarized as follows.
Reduced Withholding Tax Rate
Withholding tax rate applicable to following types of income will be reduced from 3% to 1.5% for the following categories for payments made between 1 April 2020 to 30 September 2020.
|Type of Income||Payable to companies or juristic partnerships||Payable to person liable to Thai personal income tax|
|Income under section 40 (2) of the Revenue Code derived from a post or from performance of work, commission or service fees||P||O|
|Income under section 40 (3) of the Revenue Code derived from goodwill, copyrights and any other similar rights||P||O|
|Income under section 40 (6) of the Revenue Code derived from liberal professions, namely, legal, medical, therapeutic, engineering, accounting, fine arts or other independent professions as proscribed by legislation||P||P|
|Income under section 40 (7) of the Revenue Code derived from a contract of work where the contractor is required to provide essential materials besides tools||P||P|
|Income under section 40 (8) of the Revenue Code derived from a hire of work, prizes, discount or any benefits in connection with a sale promotion, and certain other services (except for payments for hotel and restaurant services and life insurance premium)||P||P|
From 1 October 2020 to 31 December 2021, withholding tax rate will be reduced from 3% to 2% for payments of the above types of income by way of e-withholding tax only.
It is noteworthy that this reduced tax measure is not applicable for certain types of income, e.g. dividends, rental, and does not apply to payments made to foundations or associations announced under section 47 (7) (b) of the Revenue Code.
Extension of Deadline for Tax Filing
In response to the spread of COVID-19 resulting in the difficulties of preparation and submission of statutory tax returns, the filing deadlines have been extended as summarized below.
|Tax Returns||Normal Deadline||Extended Deadline|
|Annual Personal Income Tax for 2019||31 March 2020 (paper filing)|
8 April 2020 (online filing)
|31 August 2020|
|Half-Year Corporate Income Tax|
Remark not applicable to listed companies
|April – September 2020||30 September 2020|
|Annual Corporate Income Tax and Associated Companies Disclosure Form|
Remark not applicable to listed companies
|April – August 2020||31 August 2020|
|Withholding Tax and VAT Remittance||For March|
– 7 April 2020 (paper filing)
– 15 April 2020 (online filing)
– 7 May 2020 (paper filing)
– 15 May 2020 (online filing)
|15 May 2020|
|Monthly VAT Returns and Specific Business Tax Returns|
Remark not applicable to specific business tax incurred from a transfer of immovable property
– 15 April 2020 (paper filing)
– 23 April 2020 (online filing)
– 15 May 2020 (paper filing)
– 23 May 2020 (online filing)
|23 May 2020|
|Stamp Duty required to be paid in cash||1 April – 15 May 2020||15 May 2020|
Extension of Application for Income Tax Privilege for Promoted Companies
As a result of an extension of corporate income tax filing period, the Board of Investment of Thailand has allowed the promoted companies an extension of the deadline for the application for filing for corporate income tax exemption privilege. The new deadline is 31 July 2020 or not less than 30 days before the due date of corporate income tax filing.
Special Tax Deduction for Interest Expenses
Qualified corporate income taxpayers can claim tax deduction of 150% for interest expenses incurred during 1 April 2020 to 31 December 2020. To qualify for this tax measure, corporate income taxpayers must satisfy the following criteria:
- They must participate in the Soft Loan Program, the Thai Government initiative;
- Have had a revenue of not more than THB 500 million during a 12 month period for an accounting period ending on or before 30 September 2019; and
- Have no more than 200 employees;
Special Tax Deduction for Salary Costs
Qualified corporate income taxpayers can claim tax deduction of 300% for salary costs payable to qualified employees incurred during April to July 2020. To qualify for this tax measure, corporate income taxpayers must satisfy the following criteria:
- Have had a revenue of not more than THB 500 million during a 12 month period for an accounting period ending on or before 30 September 2019;
- Have no more than 200 employees;
- Paying salary to employees who (1) are insured under the Social Security Fund, and (2) earn salary or wage not higher than THB 15,000;
- Have employees insured under the Social Security Fund during the period from 1 April 2020 – 31 July 2020 and not less than the number of employees (of 200) at the end of December 2019
Accelerated VAT Refund Process
VAT operators listed in the “Good Exporter” system can receive VAT refund faster than the past. In the new regime, VAT refund requests filed through the e-filing system will be processed within 15 days while the earlier time frame was 30 days. For filing paper returns, VAT refunds will be received within 45 days which in the past normally took 60 days.
Tax Deduction for Donation to Support COVID-19 Measures
An electronic donation to the Office of the Permanent Secretary, the Prime Minister’s Office, so as to support COVID-19 Measures during the period of 5th of March 2020 to 5th of March 2021 will be entitled to tax benefits as follows.
|Type of Taxpayer||Tax Benefit|
|Personal Income Taxpayer||Tax allowance for actual donated amount but not exceeding 10% of net taxable income|
|Corporate Income Taxpayer||Tax deduction for actual donated amount but not exceeding 2% of net taxable profit|
|VAT Operator||VAT exemption for donated assets|
VAT Exemptions for Imported Goods for Donations Against
So as to cope with the COVID-19 pandemic effectively, the Thai Government has approved tax measures on VAT exemptions for the importation of medicine, medical supplies, medical tools in order to be donated for the purposes of medical treatment, medical diagnosis or COVID-19 prevention. To be eligible, a donation must be made to government hospitals, public sectors and organizations or public charities and the importation must take place between 1 March 2020 and 28 February 2021.
Tax Allowance for Health Insurance
Personal income taxpayers will be entitled to a higher tax allowance for premium payable for health insurance. This new tax allowance will be capped at THB 25,000 (a THB 10,000 increase from the usual amount of THB 15,000). The deduction for this premium together with life insurance premium and deposits living allowance cannot exceed THB 100,000 in total
Tax Allowance for Super Saving Fund (SSF)
In addition to the tax privileges for an investment in SSF which were released earlier by the government, which provided for a tax allowance for actual investment amounts but subject to the threshold of 30% of taxable income, capped at THB 200,000 and not exceeding THB 500,000 when combined with the retirement saving funds/schemes, the Thai Government has also released an additional tax allowance in order to stabilize the capital market. For this tax measure, the actual amount for investment in SSF, in SSF schemes which include a policy to invest at least 65% of their net asset value in securities listed on the Stock of Exchange of Thailand, it is possible to use a personal income tax allowance of up to THB 200,000. This threshold is not subject to any percentage of taxable income and the amount of the retirement saving funds/schemes. To be eligible, the SSF investment must be made during the period from 1 April 2020 until 30 June 2020 and held for at least 10 years.
Please note that certain tax measures explained above are currently in effect while some are still under the enactment process (therefore such measures are subject to change upon the legislation). We will keep you posted as to any further developments.
If you have any inquiries, please feel free to contact us at firstname.lastname@example.org