On 15 Aug 2023 Thailand Tax Royal Decree (No 777) was gazetted, granting an extension to the corporate tax deduction concession for STEM employee costs.

This Insight has been updated for the enactment of Royal Decree (No 777).

STEM Employees

STEM employees are employees who are educated and highly-skilled in Science, Technology, Engineering and/or Mathematics.

The Tax Deduction Concession under RD (No 777)

Royal Decree (No 777) extends the Government's encouragement for a targeted industry business to hire STEM employees under the Royal Decree (No 711) that applied for the 2019 and 2020 years and Royal Decree (No 739) for the 2021 and 2022 years, as follows:

Applicability

From 01 January 2023 to 31 December 2025.

Amount

For the costs incurred on hiring STEM employees, a concessional corporate tax deduction of 150%, that is:

• The normal 100% tax deduction for the salary costs; plus
• An additional 50% tax deduction on the portion of the salary costs of STEM employees not exceeding 100,000 baht per person per month.

Rules and Conditions

The rules and conditions prescribed in Royal Decree (No 777) are that:

The STEM employees:

1. Shall possess certificates of their skills in Science, Technology, Engineering and/or Mathematics, as specified by the Revenue Department;
2. Shall be employed under hire of labor contracts commencing between the dates of 01 Jan 2023 and 31 Dec 2025; and
3. Shall not have been employed by a targeted industry business for at least one year before commencing their hire of labor contracts under 2.

And the corporate entity claimant:

1. Shall be a targeted industry business under the law governing targeted industry businesses; and
2. Shall comply with the Revenue Department's additional rules, procedures and conditions.

Caution

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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