Software tax perk to boost SMEs

Under a scheme introduced by the Digital Economy Promotion Agency (DEPA), enterprises can claim a deduction on the software purchases at the twice the price paid. This formula can be applied on such purchases up to a limit of Bt100,000 a year, and enables such expenses to be deducted from a company’s taxable income.
The agency expects to the initiative to provide a Bt300 million boost to the country’s digital economy over the next three years.
Pondchai Hocheen, executive vice president of DEPA, said the agency set up the tax incentive to help SMEs that can benefit from locally produced software, such as for accounting, enterprise resource planning and financial systems, to support their operations. "I think the scheme will promote the local software industry as well as SMEs, which can boost their productivity with these systems at affordable prices,” Pondchai said. He said the tax incentive would apply to purchases of the local software that reached the ISO/IEC 29110, or Capability Maturity Model Integration (CMMi), standard. This requirement ensured the software was up to international standards.
The agency expects that the three-year project, starting in January, will create revenue to support local software developers and software companies to the tune of Bt300 million. Some 1,000 enterprises are expected to take advantage of the concession.
Vinit Visessuvanapoom, director of the small and medium-sized business tax administration unit at the Revenue Department, shared the view that the scheme will provide a boost to local developers and the smaller enterprises that can benefit from a boost in productivity.
Separately, Pondchai said DEPA would next year announce a venture capital funding project to support digital startups, SME transformation and co-research as part of efforts to drive the digital industry across Thailand. The agency expects to provide funding around of Bt300 million to Bt500 million next year to support the project.