New Provident Fund Act
On 11 August 2015, the new Provident Fund Act (No. 4) 2558 B.E. (2015) was published in the Royal Gazette. The purpose of the new act is to encourage employees to save money.
Keywords: Mazars, Thailand, Tax, Provident Fund Act, Royal Gazette, Finance Minister, RMF
4 September 2015
The most notable issues are as follows;
- An employee can make higher contributions than the employer. An employer will contribute at a rate specified in the fund’s prospectus. Contributions from both sides are between 2% and 15% of the employee’s salary.
- The Finance Minister has the power to allow an employee or employer to stop or postpone submitting contributions for specific businesses, for a certain period, or under certain conditions in the event of an economic crisis or disaster. The cessation or postponement cannot last more than one year.
- An employee who is 55 years old whose membership in a provident fund has been terminated due to retirement or for any other reason can receive payments in instalments for the period of time specified in the fund’s articles. These payments can be tax exempt if the employee has been a member of the provident fund for more than five years.
- An employee whose membership in a provident fund has been terminated; as a result of the fund being abolished by the employer, or as a result of the employer ceasing to do business, or for any other reason, can transfer his contributions to a Retirement Mutual Fund (RMF) or any other funds where the purpose is to save money for retirement.