Additional deduction for employing elderly people

In March 2017, the Thai government issued Royal Decree No. 639, which allows a corporate income taxpayer to deduct a greater amount of expenses incurred for employing elderly people for its income tax purposes.

Keywords: Mazars, Thailand, Tax, Royal Decree, Revenue Department

07 April 2017

The additional deductible amount shall be equal to the amount actually incurred for employing the elderly person. We set below the key points of this law:

1. This law shall apply to the accounting period started from 1 January 2016 onward.

2. The number of elderly people employed for whom this additional deduction can be taken (the “qualifying person” or “qualifying people”) shall be calculated monthly. The number of qualifying people is capped at 10% of the total number of employees who work full time in Thailand only in a given month.

3. The following conditions apply to a qualifying person:

  • he must have Thai nationality;
  • he must be 60 or more years old;
  • he must be an existing employee of the company, or must be registered for job recruitment with the Ministry of Labour; and
  • he must not be or have ever been a director or shareholder of the company or its affiliated companies.

4. To be a qualifying person, the expense incurred for employing such a person in the given month must not exceed 15,000 baht. This term “expense” means employment income paid to that person, as well as contributions to a provident fund, but does not include any payments required by law, such as contributions to the Social Security Fund. 

5. If the qualifying person is employed by more than one company at the same time, the company who employed the qualifying person first shall be entitled to this additional deduction.

6. A report containing details of the qualifying people must be prepared and kept in the event of a tax audit.

7. The company must report information about the qualifying people for each accounting period to the Revenue Department within 150 days of the last date of the accounting period.