On 30 January 2018 the Thailand Government resolved to provide a corporate tax deduction concession for easing the impact of the increases in the minimum daily wage from 01 April 2018. This Tax Insight summaries the Govt's resolution.
Following the increase in the minimum daily wage to 300 Bt in 2012, a corporate tax deduction concession was introduced for the period 01 April 2012 to 31 Dec 2013 for easing the impact. This tax deduction concession is being re-introduced again for the 2018 year but with different entitlement and rules and conditions.
An exemption from corporate tax on income equal to 15% of the minimum daily wage cost incurred by corporate entities (i.e. a 115% corporate tax deduction for such wage costs).
From 01 April 2018 to 31 December 2018.
Rules and Conditions
Claimants of this corporate income tax deduction concession shall comply with the following rules and conditions:
The corporate entity shall have revenue from sales of goods or services for their financial year of not more than 100 million baht, and not more than 200 employees;
The minimum daily wage cost shall be the amount incurred for daily work under employment contracts excluding overtime, any allowances and any tax paid by employers for employees;
The minimum daily wages paid during the period 01 April 2018 to 31 Dec 2018 shall be higher than the minimum daily wages paid prior to 01 April 2018;
The minimum daily wages paid shall not be entitled to any tax deduction concession under any other Royal Decree; and
The Revenue Department's prescribed rules, procedures and conditions shall be complied with.
If you wish to claim this tax deduction concession, it is important to comply with all of the rules and conditions. A failure to do so will cause the Revenue Dept tax audit officers to disallow the claim.
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.