Tax Privileges for e-Payment

In May 2017, the Thai government issued Royal Decree Number 640. This law allows the 100% additional deduction, for corporate income tax purposes, of the cost of acquisition of an electric data capture equipment (e.g. a credit or debit card reader or “the Equipment”). It also allows the 100% additional deduction of a transaction fee for receiving payment by debit card through the Equipment, for both corporate income tax and personal income tax purposes.

Keywords: Mazars, Thailand, Tax, CIT, PIT, e-Payment

5 June 2017

We set below the conditions under this law.

A. Conditions for the deduction of the acquisition cost of the Equipment

1. The acquisition cost of the Equipment can be deductible for corporate income tax purposes, in addition to applying normal depreciation.

2. Such a cost must be paid during the period from 1 November 2016 through 31 December 2018.

3. The deductible amount for each accounting period is equivalent to the amount that is paid in such a period.

4. The Equipment must not be leased to others.

5. The Equipment must meet the following conditions:

a. It must be used in an investment project certified by the Committee for National e-Payment Master Plan or another person assigned by the committee.

b. It must have never been used before.

c. It must be ready for use by 31 December 2016.

d. It must be depreciated over a period of no less than three years from the date that it is ready for use, except where it is destroyed, lost, or obsolete.

e. It must not be an asset which is subject to tax privileges, either in whole or in part, under other Royal Decrees issued under the Revenue Code.

f. It must not be used, either in whole or in part, in businesses that are exempt from corporate income tax under Board of Investment incentives.

6. When any of the conditions above are no longer met, this tax deduction benefit shall be terminated. If the taxpayer has deducted the acquisition cost of the Equipment under this law, such a deduction must be included as income subject to corporate income tax in the accounting period in which the acquisition cost has been deducted, except where the Equipment is destroyed, lost, or obsolete.

B. Conditions for a transaction fee for receiving payment by debit card through the Equipment

1. The fee for receiving payments made by debit card through the Equipment is deductible for the personal income tax purposes of an individual. The conditions for this deduction are: (a) the fee must be paid during the period from 1 November 2016 through 31 December 2021; and (b) such an individual must not earn income exceeding 30 million baht under Sections 40 (5) through 40 (8) of the Revenue Code in the year that he deducts such a fee.

2. The fee for receiving payments made by debit card through the Equipment is deductible for corporate income tax purposes. The conditions for this deduction are:

i. the fee must be paid during the period from 1 November 2016 through 31 December 2021;

ii. the taxpayer must not have paid-up capital exceeding 5 million baht on the last date of the accounting period for which such a deduction is made; 

iii. the taxpayer must not earn income exceeding 30 million baht by selling goods or providing services in the accounting period for which such a deduction is made; and

iv. In an accounting period where conditions (2) or (3) above are not met, the right to take such a deduction shall be terminated from that accounting period.

3. This deduction of the transaction fee shall be made in accordance with a notification of the Director-General of Revenue (to be issued later). 

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