Additional deduction of interest expenses
Under Royal Decree No. 707 issued on 12 July 2020, a company or legal partnership can claim a tax deduction of 1.5 times (1 time as a normal deduction and 0.5 times as an additional deduction) the interest expense paid on loans under the low-interest credit measures to help entrepreneurs directly and indirectly affected by the COVID-19 outbreak according to the Cabinet's resolution on 10 March 2020. This is applicable only to the interest expense on low-interest loans (soft loans) from 1 April 2020 to 31 December 2020.
Keywords: Mazars, Thailand, Tax, COVID-19, Revenue Department, Soft loans, Interest expenses
15 February 2021
In order to qualify for the additional deduction under Royal Decree No. 707, Notification of the Director-General of the Revenue Department on Income Tax No. 399 was issued on 30 December 2020, stating that such a company or legal partnership must meet the following rules, procedures, and conditions:
1. Having income of not more than THB 500 million in the last 12-month accounting period, where the last day of the accounting period ended on or before 30 September 2019, arising from or in consequence of the business conducted, and filing a corporate income tax return for that accounting period by the due date specified in the Revenue Code.
2. Having not more than 200 employees in the accounting period mentioned above.
3. Giving its consent for the financial institution which is the lender to provide at least the following information about the loan that the borrower received under the measures for low-interest loans to assist entrepreneurs who are directly and indirectly affected by the COVID-19 outbreak:
- The borrower's taxpayer identification number; and
- Details of the loan agreement, including contract number, contract date, loan amount, term of the loan agreement, and interest rate.
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