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

Updated: 31 March 2020

Tax Filing

As of 31 March 2020, there are no changes in the VAT, withholding tax, and SBT filing deadlines.

Tax Measures

The Cabinet approved the following tax measures on 10 March 2020 and 24 March 2020 to help boost the economy during the COVID-19 outbreak. Unless stated otherwise these announcements are still draft.

1. Tax filing deadline extensions

Tax

Filing extension

Corporate income tax – annual filing (PND.50)

The deadline for tax returns which must be filed during the period April to August 2020 has been extended to 31 August 2020.

Corporate income tax – half-year filing (PND.51)

The deadline for tax returns which must be filed during the period July to September 2020 has been extended to 30 September 2020.

Personal income tax
(PND.90 / PND.91)

The deadline for the 2019 tax year for which the PND.90 / PND.91 must be submitted within 30 June 2020 has been extended to
31 August 2020.

Other tax returns
(VAT, withholding tax, SBT, etc.)

The tax filing deadline will be extended based on the upcoming ministerial notification, or the private approval on a case by case basis.

Exemption of import duty for goods used for preventing and curing COVID-19

The exemption shall be effective from the notification date up to 30 September 2020.

2. Reduction in withholding tax rates

On 30 March 2020, Ministerial Regulation Number 361 to reduce withholding tax rates on certain types of payments was published in the Government Gazette.

Payment 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

The reduced withholding tax rates shall apply to payments made by a company or legal partnership for the following:

Type of payment

Recipient

Assessable income under Section 40(2) of the Revenue Code, which is income from rendering services, such as brokerage fees or commissions

A company or legal partnership conducting business in Thailand, excluding:

  • foundations or associations conducting a revenue-producing activity; and
  • foundations or associations designated by the Minister under Section 47 (7) (b) of the Revenue Code.

Assessable income under Section 40(3) of the Revenue Code, which is goodwill, copyrights, or other rights

Assessable income under Section 40(6) of the Revenue Code, which is income from liberal arts professions, such as law, engineering, or architecture

A person liable to personal income tax or corporate income tax only if that person is domiciled in or a resident of Thailand or conducting business in Thailand, excluding:

  • foundations or associations conducting a revenue-producing activity; and
  • foundations or associations designated by the Minister under Section 47 (7) (b) of the Revenue Code.

Assessable income under Section 40(7) of the Revenue Code, which is income from a contract of work whereby the contractor provides essential materials besides tools

Assessable income under Section 40(8) of the Revenue Code, which is remuneration for hire of work, prizes, discounts, or other benefits due to sales promotions and other services, excluding the following:

  • remuneration for public entertainers
  • advertisement
  • premiums for non-life insurance
  • transport charges  

Source: Government Gazette

3. Deduction of 1.5 times interest expenses

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

The company must meet the following conditions:

  • 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.
  • Not more than 200 employees.
  • Registered with the Revenue Department under the procedures set out for a tax amnesty introduced in 2016.

4. Deduction of 3 times wage expenses

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

The company must meet the following conditions:

  • Taxable income 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.
  • Not more than 200 employees.
  • Employees insured with the Social Security Fund.
  • Eligible wages for the tax incentive are those employees that earn not more than 15,000 baht per month.
  • Number of insured employees during the eligible period must not be lower than in December 2019.

5. Early VAT refunds for “Good Exporters”

A “Good Exporter” 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

6. Deduction of expenses for donations for COVID-19

Individuals, companies, and 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). The donation is also exempt from VAT.

7. Investment in Super Saving Fund

Individuals investing in a Super Saving Fund (SSF) can deduct the actual investment amount, capped at 200,000 baht, as an allowance from personal income tax. The Super Saving Fund must invest not less than 65% of its asset value in securities listed on the Stock Exchange of Thailand, during the period from 1 April to 30 June 2020.

This allowance will be in addition to the SSF allowance threshold (30% of the total income, capped at THB 200,000) and will not be included in the retirement saving fund threshold of THB 500,000.

8. Increase in tax allowance on health insurance premiums

The maximum personal income tax allowance on health insurance premiums has been increased from 15,000 baht and 25,000 baht. When included together with life insurance premiums, the total of both premiums must not exceed 100,000 per year.

Applicable from the tax year 2020 onwards.

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