Tax

RD Announcement:  New Structure of Thailand Personal Income Tax

On 27 January 2017, the Revenue Code Amendment Act (No.44) B.E. 2560 and Royal Decree (No.629) B.E. 2560 were announced in the Royal Gazette to amend deductions and tax structure for 2017 tax year which are as follows:

 

 

Tax Deductions

For the 2016 Tax Year

For the 2017 Tax Year

1

Deduction  against employment income

40% of assessable income but not more than 60,000 Baht

50% of assessable income but not more than 100,000 Baht (2)

2

Deduction against rendering of services income

40% of assessable income but not more than 60,000 Baht

50% of assessable income but not more than 100,000 Baht (2)

3

Deduction against goodwill, copyright and other rights income

40% of assessable income but not more than 60,000 Baht

As per a Royal Decree law yet to be issued (2)

4

Deduction against interest, dividends, share of profits, capital gains income

No

No

 

5

Deduction against rental of property income

10-30% of assessable income depending on the type of rented property

10-30% of assessable income depending on the type of rented property

6

Deduction  against professional income

60% of assessable income for medical professionals, 30% for other professionals

60% of assessable income for medical professionals, 30% for other professionals

7

Deduction  against construction income

70% of assessable income or actual and provable expenses

60% of assessable income or actual and provable expenses (3)

8

Deduction against business, commerce,  agriculture, industry, transport, other income

65-85% of assessable income or actual and provable expenses

60% of assessable income or actual and provable expenses (3)

 

  

 

Tax Allowances

For the 2016 Tax Year

For the 2017 Tax Year

1

Taxpayer self care allowance

30,000 Baht

60,000 Baht (2)

2

Spouse care allowance

30,000 Baht

60,000 Baht (2)

3

Child care allowance for children under 25

15,000 Baht per child for no more than 3 children

30,000 Baht per child for no more than 3 children (2)

4

Child education allowance for children under 25 at an educational institution

2,000 Baht per child for no more than 3 children

No, allowance repealed (2)

5

Parent care allowance for parents of taxpayer and spouse over 60 having income of not more than 30,000 Baht per year

30,000 Baht for each parent

30,000 Baht for each parent

6

Disabled/incompetent persons care allowance

60,000 Baht for each such person

60,000 Baht for each such person

7

Health insurance premium allowance for parents of taxpayer and spouse over 60 having income of not more than 30,000 Baht per year

Amount actually paid but not more than 15,000 Baht for each

Amount actually paid but not more than 15,000 Baht for each

8

Life insurance premium allowance for taxpayer and spouse paid to a Thailand life insurance company

Amount actually paid but not more than 100,000 Baht for each

Amount actually paid but not more than 100,000 Baht for each

9

Life insurance pension fund allowance for contributions to a life insurance pension fund (1)

15% of assessable income but not more than 200,000 Baht

15% of assessable income but not more than 200,000 Baht

10

Allowance for contributions to a provident fund (1)

15% of assessable income but not more than 500,000 Baht

15% of assessable income but not more than 500,000 Baht

11

Allowance for contributions to an Retirement Mutual Fund (1)

15% of assessable income but not more than 500,000 Baht

15% of assessable income but not more than 500,000 Baht

12

Allowance for contributions to the National Saving Fund (1)

15% of assessable income but not more than 500,000 Baht

15% of assessable income but not more than 500,000 Baht

13

Allowance for contributions to an Long Term Equity Fund

15% of assessable income but not more than 500,000 Baht

15% of assessable income but not more than 500,000 Baht

14

Allowance for contributions to the Social Security Fund

Amount contributed

Amount contributed

15

Allowance for interest paid on a home mortgage loan

Amount actually paid but not more than 100,000 Baht

Amount actually paid but not more than 100,000 Baht

(1) The aggregate of the allowances claims for contributions to life insurance pension funds, provident funds, retirement mutual funds and the National Savings Fund, shall not be more than 15% of assessable income and not more than 500,000 Baht.

(2) As prescribed in Revenue Code Amendment Act (No.44) issued on 26 January 2017.

(3) As prescribed in Royal Decree (No.629) issued on 26 January 2017.

 

 

For 2017 personal income tax year, the new tax structure is as follows: 

Portions of Net   Income (THB) 

For the Tax Years of 2013 to 2016 (2)

For the Tax Years of 2017 onward (3)

0 - 150,000

Exempt (1)

Exempt (1)

150,001 - 300,000

5%

5%

300,001 - 500,000

10%

10%

500,001 - 750,000

15%

15%

750,001 - 1,000,000

20%

20%

1,000,001 - 2,000,000

25%

25%

2,000,001 - 4,000,000

30%

30%

4,000,001 - 5,000,000

35%

30%

5,000,001 -

35%

35%

(1) As prescribed in Royal Decree (No.470) issued on 28 March 2008.

(2) As prescribed in Royal Decree (No.575) issued on 8 December 2013, Royal Decree (No.576) issued on 3 November 2014, and Royal Decree (No.600) issued on 12 February 2016.

(3) As prescribed in Revenue Code Amendment Act (No.44) issued on 26 January 2017.

 

Extension of tax incentive to promote domestic investment

 

The tax incentive to promote domestic investment that expired at the end of 2016 offered a double deduction for investment expenses from corporate income tax.  However, as a number of companies still have not completed their investment so the Cabinet has approved to renew the incentive on January 24, 2017 until the end of 2017, but the rate is reduced to 1.5 times deduction. 

 

Foreign Business

 

Minimum capital for businesses not require to obtain a Foreign Business License

 

Q: A Juristic person not registered in Thailand has received an approval from the Bank of Thailand to establish the Bank’s Representative Office  as this is  the business that does not need to  obtain the Foreign Business License according to  the Ministerial Regulation prescribing business not requiring  Foreign Business License (No.2) B.E.2559 (2016), therefore the company does not apply the   Foreign Business License. . The company would like to confirm the condition of the minimum capital to operate the business in Thailand?  

 

A: Bank representative office shall not be considered as business under the List Annexed to the Foreign Business Act B.E. 2542, so in this case, the Foreign Business License will not be required. However, with reference to the first paragraph of Section 14 of the Foreign Business Act, the foreign company who is operating the business that is not mentioned in the Annex List of such Act, must have the minimum capital of not less than 2 million Baht to start the business.

 

Scope of retail business

 

Q: A foreign company registered in Thailand has registered capital Baht 100 Million with paid-up capital of 30% and has received the BOI Promotion and Foreign Business Certificate for wholesaling of electric appliances and electronics industry such as Solar panel, Solar system.

 

The company plans to register fully paid-up capital to Baht 100 Million to operate the retail business in order to sell the Solar system products to customer in Thailand.   The invoice for the products will specify price of equipment by item or by set including installation fee.

 

The company would like to confirm whether the detail items as described in invoice above, will be considered  as scope of retail business  and will not be required to obtain the Foreign Business License is correct or not?

 

A: 1)  To operate the retail business without having to obtain the Foreign Business license, the company has to have the minimum registered and fully paid-up capital of Baht 100 million for retail business and the aforementioned minimum capital shall not include minimum capital as required by other laws.

 

2) As the company plans to issue invoice for its Solar system products stating price by item or by set including the installation service , the mentioning of installation service shall be considered as doing the service business under Annex List 3 of the Foreign Business Act 2542 which require to obtain approval of Foreign Business License prior to operation.