On 29 Apr 2021, Thailand Tax Ministerial Regulation No 374 (2564) was gazetted, amending the corporate income tax rules for write-offs of bad debts.

This Tax Insight updates you about the amended rules.

The Bad Debt Write-off Rules under MR No 374

Reason

As stated in the footnote to the Ministerial Regulation:

• The rules for the write-off of bad debts have not been updated for a long time, and as they are now inconsistent with current conditions and new financial reporting standards, it's necessary to amend the rules.

Applicability

For corporate entity financial years commencing on or after 01 Jan 2020.

The Amended Rules

The rules, as amended by Ministerial Regulation No 374, are as follows:​

Amount of debt		Rules
Debt exceeding 2,000,000 Baht		(1) Demand for payment of the debt shall have been made and pursued to the appropriate extent; and (2) Civil court action shall have been taken against the debtor and a court order issued; or (3) Bankruptcy court action taken against the debtor and a court order shall have been issued.
Debt not exceeding 2,000,000 Baht		(1) Demand for payment of the debt shall have been made and pursued to the appropriate extent; or (2) Civil court action shall have been taken against the debtor and a court order issued; or (3) Bankruptcy court action taken against the debtor and a court order shall have been issued; and (4) For the actions under (2) or (3), a corporate entity director shall have authorized in writing the write-off of the debt within 30 days of the last day of the year*
Debt not exceeding 200,000 Baht		(1) Demand for payment of the debt shall have been made and pursued to the appropriate extent; and (2) Court action would incur expenses greater than the amount expected to be recovered.

* For corporate entity fiscal years commencing in 2020, the 30 days prescribed in this rule is extended to 60 days of the last day of the fiscal year or 60 days of the date Ministerial Regulation No 374 is Gazetted, whichever is later. For corporate entity fiscal years commencing in 2021 onward, the directors shall authorize the write-off within the 30 days prescribed in this rule.

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