Royal decrees were published in the Government Gazette on June 22, 2020 providing tax exemptions to corporate entities and individuals for charitable donations, training and employment, COVID-19 support, and environmental initiatives.
In order to successfully claim tax privileges, companies should ensure they are in compliance with the Revenue Department’s procedures and regulations, as well as additional requirements to be issued.
Environment
Issue No. 694: Income tax exemption for companies or juristic partnerships for net profits arising from the domestic sale of carbon credits
Greenhouse gas emission reduction projects registered with the Thailand Greenhouse Gas Management Organization (TGO) may claim a corporate income tax exemption on net profits derived from the sale of carbon credits under the Thailand Voluntary Emission Reduction Program (T-VER).
To be eligible for the exemption, the project must be registered with the TGO between June 23, 2020 and December 31, 2020. The exemption may be applied to net profits from the domestic sale of carbon credits for three consecutive accounting periods, beginning from the accounting period in which the TGO issued the carbon credit sales certificate to the project.
Issue No. 702: 25% corporate income tax deduction for companies or juristic partnerships for purchasing biodegradable plastic products
To reduce plastic waste, companies or juristic partnerships that purchase biodegradable plastic products between January 1, 2019 and December 31, 2021 are entitled to an additional corporate income tax deduction for 25% of the costs. The biodegradable plastic products must be certified by the Office of Industrial Economics.
Donations
Issue No. 696: Exemption of income tax, VAT, specific business tax, and stamp duty for sports sponsors who have donated money or assets to the Sports Authority of Thailand, the Provincial Sports Committee, the Provincial Sports Association, or the National Sports Development Fund
Juristic persons and individuals are able to claim a 200% income tax deduction as well as exemptions from VAT, specific business tax, and stamp duty for donations made through the Revenue Department’s e-donation system from January 1, 2019 until December 31, 2019 in support of the following:
1. Organizations: Sports Authority of Thailand, the Provincial Sports Committee, the Provincial Sports Association, and the National Sports Development Fund;
2. Items: Sports equipment, training, competitions, sports center development, sports event management, athlete development, and support for sports personnel.
Donations of money or assets are deductible from assessable income or net profits in twice the amount donated. For individuals, the deduction must not exceed 10% of assessable income after all allowances and deductions; for businesses, the deduction must not exceed 10% of net profits before all deductions for public charity, education, or sports.
Issue No. 699: Exemption of income tax, VAT, specific business tax, and stamp duty for donations from companies or juristic partnerships supporting the Industry 4.0 “Center for Personnel Development”
Companies may claim a 300% tax deduction for the cost of assets donated to an Industry 4.0 “Center for Personnel Development” from January 1, 2020 until December 31, 2020. Depending on the company’s total annual revenue, the tax deduction claimed must not exceed 60%, 9% or 6% of annual revenue and is capped at 100 million baht.
The assets must not be entitled to any tax benefits under another Royal Decree. Businesses exempt from corporate income tax under the law governing investment promotion, targeted industry businesses, or Eastern Economic Corridor businesses are not eligible to claim the deduction.
Issue No. 706: Exemption of income tax, VAT, specific business tax, and stamp duty for individuals and corporations or corporate partnerships for online donations of money and assets to the Thai Red Cross from January 1, 2020 until December 31, 2022.
Juristic persons and individuals are able to claim a 200% income tax deduction as well as exemptions from VAT, specific business tax, and stamp duty for donations made through the Revenue Department’s e-donation system to the Thai Red Cross from January 1, 2020 until December 31, 2022. For individuals, the deduction must not exceed 10% of assessable income after all allowances and deductions; for businesses, the deduction must not exceed 10% of net profits before all deductions for public charity, education, or sports.
Training and Employment
Issue No. 697: Income tax exemption for companies or juristic partnerships that provide domestic seminars for employees to promote domestic tourism and stimulate the country’s economy
To promote domestic tourism, support the hotel industry, and stimulate Thailand’s economy, companies may claim an additional corporate tax deduction on 100% of the costs for staff training seminars held in Thailand, including seminar rooms, accommodation, transportation, service fees paid to tour operators, and other related costs. The deduction may be claimed on training seminars conducted between January 1, 2020 and December 31, 2020.
Issue No. 704: Income tax exemption for companies or juristic partnerships that employ former inmates who have been released from prison.
Businesses may claim an additional 50% deduction for the costs paid to hire a former inmate with a salary of no more than 15,000 baht/person/month.
The deduction may be claimed on employment costs incurred between January 1, 2020 and December 31, 2020. It will apply for no more than three years after the date of employment.
The employer must not claim any tax benefit under another Royal Decree for the costs of former inmates. Businesses should file withholding tax returns for the relevant employees through the Revenue Department’s e-filing system.
COVID-19
Issue No. 700: VAT exemption for the importation of products used for treatment, diagnosis or prevention of COVID-19 to be donated to government hospitals, organizations, or charitable organizations.
VAT exemption may be granted to companies and juristic partnerships who import goods related to the treatment, diagnosis, or prevention of COVID-19 and donate them to government hospitals, government organizations, and charitable organizations and nursing homes under the Revenue Code Section 47 (7) (b). The VAT exemption may be claimed for products imported between March 1, 2020 and February 28, 2021.
Businesses who claim the VAT exemption may not deduct the cost of the imported and donated goods as an expense when calculating corporate income tax or VAT.
Issue No. 701: Income tax and VAT exemption for individuals, companies, or juristic partnerships for donations of money or assets to the Prime Minister’s office for COVID-19 support from March 5, 2020 until March 5, 2021.
Individuals and companies may claim an income tax deduction and VAT exemption for donations of money or assets to the Government’s COVID-19 fund made through the Revenue Department’s e-donation system from March 5, 2020 to March 5, 2021.
Individuals and companies may deduct 100% of the donated amount. For individuals, the amount deducted must not exceed 10% of assessable income after deducting all expenses. For companies, the amount deducted must not exceed 2% of net profits.
Donated assets are exempt from VAT for VAT taxpayers.
Health insurance
Issue No. 365 Higher tax allowance for income paid as health insurance premiums
To motivate citizens to sign up for health insurance, personal income taxpayers may claim a higher allowance for the amount paid for health insurance premiums.
For insurance premiums paid from January 1, 2020 onwards, taxpayers may deduct up to 25,000 baht for health insurance premiums paid to a life insurance or non-life insurance company in Thailand. This deduction, together with deductions for life insurance premiums and deposit living allowance, may not exceed 100,000 baht in total.