On 2 March 2017, Royal Decree (No 639) was gazetted, providing a corporate tax deduction concession for the costs of hiring senior employees over the age of 60 years.

This Insight summarizes the rights and obligations under Royal Decree (No 639).

The Tax Deduction Concession under RD (No 639)

Applicability

For financial years beginning on or after 1 January 2016.

Amount

For the costs of hiring employees over the age of 60 years, a corporate income tax deduction concession equal to 200% of the costs, that is:

• The usual tax deduction for the employment costs; plus
• An additional 100% deduction for the employment costs.

Rules and Conditions

The rules and conditions prescribed in Royal Decree (No 639) are as follows:

The senior employees over the age of 60 years shall:

1. Have Thai nationality;
   
2. Have previously been employed by the corporate entity, or registered with the Department of Employment, Ministry of Labor; and shall
3. Have never been a director or a shareholder of the corporate entity or an affiliate of the corporate entity.

The corporate entity claimant shall:

1. Not claim this tax concession for employees over the age of 60 years for more than 10% of the total number of employees of the corporate entity;
2. Be the first corporate entity employer of the employees over the age of 60 years (in the case of such employees being employed by more than one corporate entity at the same time);
3. Pay a salary to the employees over the age of 60 years of not in excess of 15,000 Baht per month; and shall
4. Comply with the Revenue Department's additional rules, procedures and conditions.

Caution​

Whilst Royal Decrees provide rights and entitlements to tax concessions, they also prescribe obligations to comply with rules, procedures and conditions.

If the Revenue Department's tax audit officers find any of the rules, procedures or conditions have not been met, the entitlement to the concession may be lost, and back-taxes plus penalty and surcharge could be payable.

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