On 10 Mar 2020, Thailand tax Ministerial Regulation No 357 was gazetted that amends the personal tax incentive for investments in RMFs, and introduces a personal tax incentive for investments in SSFs, for and from the 2020 year.

This Insight summarizes the personal tax incentives prescribed in MR No 357.

RMF, LTF and SSF Mutual Fund Investments

From and including 2004 residents of Thailand including foreign residents have utilized the Retirement Mutual Funds and the Long Term Equity Funds as salary sacrificing tax allowances. At the end of 2019 however, Long Term Equity Funds ceased, and from and including 2020, Ministerial Regulation No. 357 prescribes income tax incentives for investments in Super Savings Funds to replace the tax incentives for investments in Long Term Equity Funds.

Tax Incentives Under Ministerial Regulation No 357

The personal income tax incentives under MR No 357 are as follows:

Retirement Mutual Funds

For resident individuals:
Purchasing investment units in Retirement Mutual Funds from 01 Jan 2020 onward		Deduction from assessable income for the portion of investment units purchased per year which deduction shall not exceed 30% of assessable income and shall not exceed 500,000 Baht per year
Redeeming investment units in Retirement Mutual Funds		Exemption from income tax on the amount of income derived from the redeeming

Super Savings Funds

For resident individuals:
Purchasing investment units in Super Savings Funds from 01 Jan 2020 to 31 Dec 2024		Deduction from assessable income for the portion of investment units purchased per year which deduction shall not exceed 30% of assessable income and shall not exceed 200,000 Baht per year
Redeeming investment units in Super Savings Funds		Exemption from income tax on the amount of income derived from the redeeming

Rules, Procedures and Conditions

The rules, procedures and conditions prescribed in Ministerial Regulation No. 357 include the following:

1. Deduction from assessable income for purchasing investment units:

1. The deduction from assessable income for the purchase of investment units in the Funds when combined with deductions for contributions to Provident Funds or Government Pension Funds or School Welfare Funds or Insurance Pension Funds or National Savings Funds shall not exceed 500,000 Baht for the tax year,
2. For Retirement Mutual Funds, the purchased investment units shall be held for not less than 5 years from the date of purchase,
3. For Super Savings Funds, the purchased investment units shall be held for not less than 10 years from the date of purchase,
4. The Revenue Department's additional rules, procedures and conditions shall be complied with, and
5. In the case the rules, procedures and conditions are not complied with, the entitlement to the tax deduction will be lost and income tax shall be paid for the tax deductions claimed.

2. Exemption from income tax on income derived from redeeming the units:

1. The exemption from income tax shall be only for the amount of income that is derived when redeeming the investment units for which the tax deduction entitlement has been claimed,
2. For Retirement Mutual Fund units, only after the investment units have been held for at least 5 years from the date of purchase, and only after the age of 55 years, and
3. For Super Savings Fund units, only after the investment units have been held for at least 10 years after the date of purchase.

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