The rapid outbreak of the novel Coronavirus (COVID-19) has already caused a slowdown in the overall global economy. Governments around the world are acting decisively to protect their businesses and individuals from the economic disruption being caused by the on-going pandemic. Whether through tax cuts, investment incentives or changes to filing deadlines, tax systems will play a significant part in helping to alleviate the financial and economic turmoil that is now occurring.
In Thailand, the Government has introduced several measures to stimulate the country’s economy in light of the outbreak of COVID-19. Below is the outline of the tax measures. The Ministry of Finance, acting through Cabinet Resolutions, expects to enact further guidelines and conditions relevant to these measures:
To increase liquidity for individuals and business operators, the Ministry of Finance has announced a withholding tax reduction from 3% to 1.5% for the payments made from 1 April to 30 September 2020. The withholding tax will subsequently be reduced to 2% from 1 October 2020 to 31 December 2021, provided that the payment is made via e-Withholding Tax system.
Eligible SMEs can claim a 150% deduction for interest expenses incurred on loans obtained under the Government’s funding initiative providing THB 150 billion in soft loans to SMEs at an interest rate of 2 percent for the first two years. The funding of this initiative will be supported by the Government Savings Bank. The maximum loan that an eligible SME can apply for is capped at THB 20 million. To be eligible for the increased tax deduction, the SME must meet the following conditions for its most recent prior tax year ending on or before 30 September 2019:
SME employers will be permitted a deduction of 3 times salary expenses for corporate income tax purposes for salaries paid to employees during the period from April to July 2020. To be eligible for the deduction, the following conditions must be met:
VAT operators who participate in the ‘Good Exporter’ program will receive VAT refunds within 15 days after the date of filing, provided that VAT returns are filed via e-filing system and within 45 days for those making paper filings.
Individuals investing in a Super Saving Fund (SSF) having an investment policy whereby at least 65% of its net asset value consists of shares of companies traded on the Stock Exchange of Thailand, during the period from 1 April to 30 June 2020 can deduct the actual investment amount capped at THB 200,000 as an allowance for personal income tax purposes, provided that the investment in the fund will be held for at least 10 years. This allowance will be in addition to the SSF allowance threshold (30% of the total income, capped at THB 200,000) and will not be count against the retirement saving fund threshold of THB 500,000.
The filing deadline for personal income tax returns (form PND.90/91) is further extended from a previously extended deadline of 30 June 2020 to the new deadline date of 31 August 2020.
Donations given to support COVID-19 measures via the Revenue Department’s e-Donation system during 5 March 2020 to 5 March 2021 will be treated as follows:
The filing deadlines for corporate income tax of a non-listed company is extended as follows:
Without this tax relief measure, the regular filing and payment deadline is within 150 days from the last day of an accounting period.
While this document is updated on a regular basis, it has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice.
Head of Regional Tax Practice
Thailand Tax Director
Head of Regional Compliance & Investigations Practice