The Cabinet has approved the amendment of the Provident Fund Law, which should come into effect this year. An employee can currently contribute into a provident fund at the same rate matched by the employer.
Keywords: Mazars, Thailand, Tax, Provident Fund, Cabinet, Personal Income Tax, Payroll
8 May 2015
Once effective, the employee will be allowed to contribute more than the employer. For tax purposes, the employee will be able to claim a tax deduction at an amount equivalent to his or her provident fund contribution, capped at THB 500,000 per year (including the retirement mutual fund and pension life insurance premium).
Furthermore, should an employee resign before his or her retirement, under current rules he must withdraw the entire amount contributed into the fund and such an amount will be taxed in that year. Following this amendment, an employee who resigns after he turns 55 years old will be allowed to withdraw from the fund the contributed amount on an installment basis.