Thailand Capital Expenditure Corporate Tax Deduction
Update | January 2017
On 24 January 2017, the Thailand Government resolved to extend the capital expenditure corporate tax deduction concession for another one year period of time from 01 Jan 2017 to 31 Dec 2017. This Tax Insight Article has been updated to reflect the resolution.
Update | May 2016
On 17 May 2016, the Director-General of Revenue issued Notification on Income Tax (No 266) prescribing, in addition to other matters, the financial accounting years over which the capital expenditure corporate tax deduction concession under Royal Decree (No 604) shall be claimed, which years are as follows:
Tax Insight | April 2016
On 21 April 2016, Royal Decree (No 604) was gazetted, providing a temporary corporate tax deduction concession for expenditure incurred on additions, alterations, extensions or improvements of property, plant and equipment assets. This Tax Advantage Insight Article summarizes the corporate tax deduction concession.
The Tax Concession
An exemption from corporate income tax (i.e. a corporate tax deduction) for expenditure incurred on additions, alternations, extensions and/or improvements of property, plant and equipment assets (which assets are not normally permitted as expenses under Section 65 ter (5) of the Revenue Code, but which are permitted depreciation allowance claims under Section 65 bis (2) of the Revenue Code), as follows:
(1) As prescribed in Royal Decree (No 604) issued on 18 April 2016.
(2) As resolved by the Government at its Cabinet Meeting on 24 January 2017.
The types of property, plant and equipment assets that qualify for this tax concession under Royal Decree (No 604) are as follows:
Rules and Conditions
The rules and conditions prescribed in Royal Decree (No 604) for this tax concession are as follows:
Royal Decree (No 604) also prescribes that in the event of a company failing to comply with any of the rules, procedures and conditions, the right to the tax concession shall cease, and the amount of expenditure incurred on additions, alternations, extensions or improvements of assets shall be taken up as income in the year the right to the tax concession ceases.
If your company wishes to claim this corporate tax deduction concession, it's important to know and fully comply with each and every one of the Director-General's prescribed rules and conditions, as a failure to do so will cause the tax audit officers to disallow the claim.
This Tax Insight Article is general information only. It should not be used to determine any matter without consulting with an experienced Thailand tax advisor.