Due to the global crisis caused by the COVID-19 pandemic, the Thai Government has implemented a number of important initiatives aimed at supporting the Thai economy and affected industries.
As part of these initiatives, the Ministry of Finance of Thailand has enacted several important short terms and medium terms tax relief measures to support individual and corporate entities in Thailand to ease the hardships faced by many during these uncertain times. Set out below is a summary of these measures.
Defer tax filings and payments
- Filing of tax returns and payments of the following taxes will be deferred:
|Category of Tax||Period of Applicable Tax||New Filing and
Payment Due Dates
|Personal income tax||2019||August 31, 2020|
|Corporate income tax||2019||August 31, 2020|
(including payments to offshore recipients)
|March – April
|May 15, 2020|
|Value Added Tax (VAT)||March – April
|May 23, 2020|
|VAT for payments to offshore entity||March – April
|May 15, 2020|
|Specific business tax||March – April
|May 23, 2020|
|Stamp duty||Due date is between
April 1, 2020 – May 15, 2020
|May 15, 2020|
|Excise tax for oil trading||April – June
|Within the 15th day of the month following the month which such goods are taken from the factory or bonded warehouse|
Reduce withholding tax rate for certain payments
- The withholding tax rate on certain income such as service fees and commissions, normally subject to 3% withholding tax, will be reduced to 1.5% from April 1, 2020 to September 30, 2020.
- For taxpayers registered under the e-Withholding Tax System, the withholding tax rate will be reduced to 2% for payments made from October 1, 2020 to December 31, 2020.
Increase tax deduction for SMEs
- Loan interest can be deducted at 1.5 times the actual amount in the SMEs’ corporate income tax calculation, provided that (i) the loan interest must be under the soft loan campaign for SMEs that are directly or indirectly affected by the COVID-19 pandemic; (ii) the interest must be paid in the period between April 1, 2020 to December 31, 2020; and (iii) the SMEs must have a single accounting book.
- Employment salary from April 2020 to July 2020 can be deducted at 3 times the actual amount in the SMEs’ corporate income tax calculation for 2020, provided that (i) the employee must be registered under the Social Security System; (ii) the monthly salary must not exceed THB 15,000; and (iii) the eligible SME must maintain the number of employees not lower than the number registered under the Social Security System as of the end of December 2019.
- The eligible SMEs must have (i) total 12 months’ revenue of less than THB 500 million; (ii) total employees of less than 200 persons; and (iii) its accounting period ending on or before September 30, 2019.
Increase the allowance of personal income tax calculation
- From April 1, 2020 to June 30, 2020, any individual investing in a Super Saving Fund (“SSF”) with a policy to invest at least 65% of its net assets value in shares listed on the Stock Exchange of Thailand, can apply for the actual investment amount not exceeding THB 200,000, as an allowance in addition to the SSF and retirement saving fund threshold, in their personal income tax calculation for the year 2020, provided that the investment in the fund will be held for at least 10 years.
- As of the tax year 2020 onwards, the threshold on a health insurance premium allowance shall be increased up to THB 25,000 (from THB 15,000). However, the amount of health insurance premium together with the life insurance premiums and deposits for life must not exceed THB 100,000.
Expedite VAT refund for Good Exporters
- Business operators who have been approved as “Good Exporters” by the Revenue Department shall receive VAT refunds within (i) 15 days (normally takes 30 days) from the date of filing the online VAT return form via this site and this site; or (ii) 45 days (normally takes 60 days) from the date of filing VAT return in paper form at the Area Revenue Branch Office.
Exempt import duty on certain medical supplies
- Applicable import duties imposed on 66 items categorized as medical supplies or others which help treat, diagnose or prevent COVID-19 will be exempted from March 26, 2020 to September 30, 2020. The full list of exempted items will be further announced by the Ministry of Public Health.
Exempt taxes on debt restructuring
- Tax exemptions on personal income tax and corporate income tax for the debtor on the amount of debt released from debt restructuring;
- Tax exemptions on personal income tax, corporate income tax, VAT, specific business tax, and stamp duty for debtor and creditor for income derived from sale, service or arranging of an instrument in relation to the debt restructuring; and
- Tax exemptions on personal income tax, corporate income tax, specific business tax, and stamp duty for income derived from the transfer of mortgaged immovable property to a person other than the creditor.
- The creditor shall not be a financial institution.
- Debt restructuring must take place between January 1, 2020 to December 31, 2021.
- The conditions of writing – off bad debt due to debt restructuring will be relaxed.
- The transfer fee for the transfer of immovable property in relation to the debt restructuring will be reduced from 2% to 0.01%, provided that the transfer of immovable property must be on the effective date of relevant notification until December 31, 2021.
As it is difficult to accurately forecast all of the potential effects of the COVID-19 pandemic in Thailand, tax relief measures and non-tax measures may continuously be introduced and adapted depending on the economic situation. Investors and operators who are impacted or could potentially be impacted by the COVID-19 pandemic are advised to follow the updated measures from various Thai government agencies.
For further information, please contact our team at Kudun and Partners.