Personal income tax benefits for employees

As set out in our tax article for July 2017, the Thai government issued Royal Decree Number 641 giving personal income tax benefits to an employee (“the Employee”) of a company or legal partnership that conducts business in a targeted industry, and has its place of business (defined as a place that is used in the normal course of business or used for manufacturing goods on a regular basis) in Chachoengsao, Chonburi, or Rayong Provinces.

Keywords: Mazars, Thailand, Tax, Personal Income Tax, PIT, Royal Decree Number 641, Revenue Department

In September 2017, the Thai Revenue Department issued Notification of the Director-General of Revenue on Income Tax No. 306 which sets out the conditions that must be met in order for the Employee to be entitled to the tax benefits under Royal Decree Number 641.

We set below a summary of that notification:

1. The Employee must:

a. for a management worker:

    (1) have experience working abroad at the division manager level (or equivalent) or higher, and must be working or have worked abroad in all levels for 10 years or more; or

    (2) have experience working abroad at the division manager level (or equivalent) or higher for three years or more, and must be working or have worked abroad in all levels, including at the division manager level (or equivalent) or higher for 5 years or more.

b. for an expert worker:

    (1) have a bachelor’s degree (or equivalent) or higher;

    (2) work under an employment agreement with a company or legal partnership that conducts business in a targeted industry, and his work must be related to or benefit that industry in one or more ways; and

    (3) have experience working abroad in areas related to or that benefit the targeted industry for 10 years or more (if the Employee earned a bachelor’s degree) or 8 years or more (if the Employee earned a master’s degree or higher).

c. for a researcher:

    (1) have a doctor of philosophy degree;

    (2) conduct research and development under an employment agreement for a company or legal partnership that conducts business in a targeted industry, where that research and development is related to or benefits that industry in one or more ways; and

    (3) have experience conducting research and development abroad for a foreign company, legal partnership, university, research institution, or other governmental or private institution, where that research and development is related to or benefits the targeted industry, as follows:

         (a) for 5 years or more; or

         (b) for a period from 3 years to less than 5 years, where he conducted research or development that received an award at the international level, or was published in a journal that is internationally recognized by the Office of Higher Education or the Thailand Research Fund, or where that research or development was registered as intellectual property in Thailand or overseas under the Employee’s name or the name of the foreign company, legal partnership, university, research institution, or other governmental or private institution for which the Employee worked. 

2. The Employee must earn employment income of 200,000 baht a month or more under an employment agreement with the company or legal partnership that conducts business in a targeted industry.

3. The employer of the Employee must provide the Revenue Department with details of the Employee who wishes to claim the personal income tax benefit under Royal Decree Number 641 by filing a specific form.

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