Specific Business Tax Reduction
Clarification of the specific business tax reduction for financial institutions. In 2008, Royal Decree No.469 announced a specific business tax (‘SBT’) reduction from 3.00% to 0.01% for certain financial institutions.
Keywords: Thailand, Tax, Revenue Department, SBT, Financial Institutions, Bank of Thailand
The Revenue Department considered that Section 5(4) needed further clarification:
Section 5(4) “A reduction of the specific business tax shall be collected at the rate of 0.01% for the business carrying on as commercial banking where interest or discount from debt instrument or profit before deducting any expense, is derived from trading debt instruments.”
As a result, Royal Decree No.525 was issued in 2011:
“Specific business tax shall be collected at the reduced rate of 0.01% for the following income:
- Interest or discounts earned or profits derived from trading promissory notes or bills of exchange as prescribed by the Securities and Exchange Commission.
- Interest received on deposit accounts which the financial institution held with the Bank of Thailand.”
It is important to note that the purpose of issuing Royal Decree No.525 is to promote the financial policies of the Bank of Thailand which aims to expand the banking business.
Source: www.rd.go.th
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