Bend your mind to get tax deduction benefits!
TO PROMOTE investment and support certain activities, the government has provided benefits in the form of additional deductions for certain types of expenditure.
Many new tax benefits have been announced during the past two years. Now is a good time for companies to review the tax benefits available for their 2016 tax filing (but not those SMEs who have already been granted tax exemption for 2016 under different regulations).
The additional tax deduction benefits can be summarised in two groups: (1) expenditure on operations, and (2) donations/expenses to specific recipients.
Significant items of expenditure on operations are:
Investment in new assets: An extra deduction over a period of three to 20 years in addition to the normal depreciation is allowed for investments in specific types of new assets, for example machinery, furniture and fixtures, computer programs and permanent buildings, which have been acquired and paid for between November 3, 2015, and December 31, 2016.
Research and Development: A tax deduction of up to 300 per cent is allowed for expenses incurred in relation to R&D, including experimental development and innovation, from January 1, 2015, to December 31, 2019, with threshold amounts depending on the revenue of the company.
Domestic seminars: The double tax deduction has been extended to cover expenses paid for seminar rooms, accommodation, transportation and other expenses related to domestic seminars and training for employees, or expenses paid to authorised tourism operators and guides for the seminars and training. This extended benefit is available only for the calendar year 2016.
Double tax deductions that have been in effect for many years include:
Internal and external training expenses.
Salaries of disabled persons hired (a tax deduction of up to 300 per cent may be possible in certain circumstances) and expenditure for providing facilities for disabled persons.
Cost of books or electronic devices purchased for an in-house library up to Bt50,000.
Significant donations/expenses to specific recipients are:
The following donations are allowed a double deduction to the extent that the combined amount does not exceed 10 per cent of net profit before the deduction of donations for charity, public benefit, education or sport.
Donations to sports organisations.
Donations to the Safe and Creative Media Development Fund and funds relating to art, culture, archives and archaeology.
Donations to educational institutions in either the public or private sector.
Expenses paid to support educational programs under projects approved by the Ministry of Education or to support learning and amusement activities.
Donations to an occupational training program and organising activities under the care of the Department of Juvenile Observation and Protection.
Cost of books or electronic devices for educational institutions in either the public or private sector.
It should be borne in mind that donations are allowed for tax deduction only in the year in which a company makes a taxable profit. If it incurs a taxable loss the deduction will not be allowed.
Furthermore, in order to obtain the double deduction benefits, the company will be required to fulfil the conditions specified under the related regulations as well as retain all related supporting documents, eg receipts, acknowledgement letters, correspondence with the government/party, forms etc. for the purpose of tax compliance.
Authors: Cheeranun Naksomsong, Senior Manager,
Benyapa Changpradit, Consultant
PwC
