Tax Measures on COVID-19

The Cabinet has approved the following tax measures to help boost the economy during the COVID-19 outbreak.

Keywords: Mazars, Thailand, Tax, COVID-19, Cabinet, Withholding Tax, VAT Refund, Donations

19 March 2020

1. Reduction in withholding tax rates

The withholding tax rate for service fees, such as those for the hire of work, services, commissions, and professional fees, will be reduced, as shown in the table below. Those who will receive the benefits from this tax measure include individuals, companies, and juristic partnerships.

Period covered

Current rate

Reduced rate

Filing method

1 April 2020 –

30 September 2020

3%

1.5%

Any filing method

1 October 2020 –

31 December 2021

3%

2%

Only e-withholding tax filing

2. Deduction of 1.5 times interest expenses

A company that has taken out low-interest loans (soft loans) can claim a tax deduction for 1.5 times the interest expense paid from 1 April 2020 to December 2020.

The company must meet the following conditions:

  • It must have taxable income of not more than 500 million baht from its business in the last 12-month accounting period, where the last day of the accounting period ended on or before 30 September 2019.
  • It must have not over 200 employees.

In order for a company to claim this deduction, it must register with the Revenue Department under the procedures set out for a tax amnesty.

3. Deduction of 3 times wage expenses

A company that does not lay off employees or reduce staff can claim a tax deduction for 3 times the wage expenses paid from April 2020 to July 2020.

The company must meet the following conditions:

  • It must have taxable income of not more than 500 million baht from its business in the last 12-month accounting period, where the last day of the accounting period ended on or before 30 September 2019.
  • It must have not over 200 employees.
  • It must retain those employees who are registered with the Social Security Office, and their monthly wages must not be over 15,000 baht.
  • The number of current employees must not be lower than that in December 2019.

4. Early VAT refunds for goods exporters

An exporter of goods as defined in Departmental Regulation Tor.490/2562 which has capital of over 10 million baht will receive a VAT refund earlier than normal, as follows:

  • Within 15 days if filing electronically
  • Within 45 days if filing on paper

5. Deduction of expenses for donations for COVID-19

Individuals, companies, and juristic partnerships that make a donation electronically to the Office of the Permanent Secretary, Prime Minister’s Office, to help fight the COVID-19 virus between 5 March 2020 and 5 March 2021 can deduct the expenses for such a donation (not exceeding 10% of net income for an individual and not exceeding 2% of net income for companies or legal partnerships). VAT of donation is also exempted.

Want to know more?