Thailand Depreciation Tax Rates
On 5 August 2016, Royal Decree (No 620) was gazetted, amending the depreciation tax rate allowances for motor vehicle prototypes used for research and development and/or performance testing purposes. This Tax Insight has been updated for this amendment.
Depreciation Tax Rates
Unless businesses are entitled to specific tax concessions for depreciation, the maximum rates of depreciation allowances for tax purposes in Thailand are as follows:
(1) As amended by Royal Decree (No 620) gazetted on 5 August 2016, and applying from and including 1 January 2016.
Accelerated Depreciation Tax Rates
Businesses that have fixed assets excluding land of not more than 200 million Baht and not more than 200 employees are entitled to accelerated rates of depreciation allowances, as follows:
Tax Rules for Claiming Depreciation Allowances
Depreciation Rates Adopted for Accounting Purposes
Tax deductions for depreciation allowances cannot exceed the amount of depreciation that is adopted for accounting purposes and accounting depreciation rates cannot be uplifted to the maximum rates under the tax law.
That is, if a rate of depreciation allowance adopted for accounting purposes is lower than the maximum rate prescribed in the tax law, the depreciation allowance for tax purposes is permitted only at the (lower) rate adopted for accounting purposes.
Depreciation Rate Changes
Once a rate and method of depreciation for a category of assets is adopted, that rate and method cannot be changed unless the prior written approval of the Revenue Department is firstly obtained.
Assets Acquired under Hire Purchase or Installment Sales Contracts
For assets acquired under hire purchase or installment sales contracts, depreciation shall be calculated (at no more than the prescribed maximum rate for the particular asset) on the total amount payable under the hire purchase or installment sales contract (i.e. the total of all the principal and interest payments under the hire purchase or installment sales contract).
Additionally, the amount of the tax deduction for depreciation in any year shall not exceed the amount of principal and interest payable under the hire purchase or installment sales contract for that year.
This Tax Insight is general information only. It should not be used to determine any particular matter without consulting with an experienced Thailand tax advisor.