Covid-19 tax relief measures in Thailand.
The economic slowdown caused by the COVID-19 pandemic places Thai businesses under significant financial pressure in keeping up with their ongoing financial obligations which remain otherwise unaffected by the pandemic. The Ministry of Finance, in response, announced tax relief measures to ease the burden on employers and employees. The measures currently in effect are:
Tax return deferral
The filing deadline for personal income tax returns (form PND.90/91) is extended from 31 March 2020 (or 8 April 2020 for e-filings) to 30 June 2020
The corporate income tax submission for the 2019 accounting year (PND 50) is extended to 31 August 2020. The Board of Investment has also extended the application deadline for corporate income tax exemption privileges to 31 July 2020, or not less than 30 days before the corporate income tax filing date.
Withholding tax reduction
Withholding tax will be reduced from 3% to 1.5% for payments made from 1 April to 30 September 2020. Subsequently, in the period from October 2020 to 31 December 2021, the withholding tax will be set at 2% if the payment is made via the e-Withholding Tax system.
VAT refunds
VAT refund will be granted within 15 days (compared the standard 30-day period) if VAT returns are filed via e-filing system and within 45 days (compared to the standard 60-day period) for paper filings.
Employment relief measure
The compulsory social security contributions made by employers and insured will decrease from 5% to 4% for March to August 2020. The Government’s contribution remains the same at 2.75%
SMEs’ loan interest deduction
Small and medium-sized enterprises (SMEs) can claim up to 150% deduction for interest expenses incurred on loans (capped at THB 20 million) obtained under the Government’s Soft Loan initiative passed by the Thai government in response to the distress caused by the pandemic. To be eligible for the tax deduction, the SME must meet the following criteria for the latest accounting period ending on or before 30 September 2019:
- Annual revenue not exceeding THB 500 million
- Number of employees not more than 200 persons
- Maintain a single account only
Salary cost deductions
SMEs employers can deduct up to 300% of salary costs paid to employees in the period from April to July 2020. To be eligible for the deduction, SMEs must meet the following conditions:
- Annual revenue not more than THB 500 million
- Number of employees not more than 200 persons
- Salaries not more than THB 15,000 per month per employee
- Employees are insured under the social security fund
- Number of insured employees in the above mentioned period should not be lower than the number of insured employees as of 31 December 2019
Tax relief for COVID-19 donations
Donations given to support the fight against the COVID-19 pandemic granted through the Revenue Department’s e-Donation system in the period from 5 March 2020 to 5 March 2021 will be eligible for the following tax relief:
- Cash donations by individuals can be treated as a deductible allowance up to 10% of the total income after deducting all other expenses
- Juristic persons can claim cash or asset donations as a deductible expense for up to 2% of the net taxable profit
- Donation of assets is exempt from VAT for VAT operators
Individuals investing in a Super Saving Fund (SSF)
If an individual invests at least 65% of their net assets value in shares listed on the Thai Stock Exchange, during the period from 1 April to 30 June 2020, they can deduct the actual investment amount (capped at THB 200,000) as an allowance for personal income tax purposes, provided that the investment is held for at least 10 years.
As the situation develops and further details are provided, Acclime Thailand will keep you informed. If you require assistance from our team in discussing and implementing the above measures do not hesitate to contact our tax advisors.