Thailand Payroll: Tax Allowances 2024

EP 1: Tax Allowances for Retirement Investment Planning

The following six types of retirement investments can be deducted from taxable income, with the combined maximum limit being THB 500,000 per tax year:

1. Pension Life Insurance Premiums: These are tax-deductible up to 15% of taxable income, with the maximum being THB 200,000. The insurance policy must have a coverage period of at least 10 years, be issued by a Thai insurance company, provide regular benefit payments, and specify that payments commence when the insured is between 55 and 85 years old.
2. Provident Fund (PVD)/Private School Teachers' Welfare Fund Contributions: These are tax-deductible up to 15% of taxable income, with the maximum being THB 500,000.
3. Government Pension Fund (GPF) Contributions: These are tax-deductible up to 30% of taxable income, with the maximum being THB 500,000.
4. Retirement Mutual Fund (RMF) Investments: These are tax-deductible up to 30% of taxable income, with the maximum being THB 500,000. Conditions include the following:  
   
   • purchasing RMF units at least once a year without suspending purchases for more than one consecutive year.
   • holding the RMF units for at least five years from the first purchase date and redeeming them when the holder is at least 55 years old, unless due to disability or death.
   • not receiving dividends or other payments from the RMF, and not borrowing or withdrawing funds before the redemption period.
5. Super Saving Funds (SSF) Investments: These are tax-deductible up to 30% of taxable income, with the maximum being THB 200,000. This allowance is available for five years (2020-2024). The investor must hold the SSF units for at least 10 years from the purchase date, unless redeemed due to disability or death.
6. National Savings Fund (NSF) Investments: These are designed for self-employed individuals without an employer. Contributions are tax-deductible up to THB 30,000 per year.

Important Notes on Utilizing Tax Allowances for Insurance Premiums and Investments

• Insurance Premiums: Policyholders must inform the insurance company of their intention to use the tax allowance, so that the company can report the information to the Revenue Department.
• Investment Funds: Investors must inform the asset management company of their intention to use the tax allowance, so that the company can report the information to the Revenue Department.

EP2: Tax Allowances for Life Insurance, Health Insurance, and Donations

The following categories of payments can be deducted from taxable income:

1. Life Insurance Premiums: These are tax-deductible up to the actual amount paid, with the maximum being THB 100,000. Conditions include the following: 
   • The policy must have a coverage period of at least 10 years. 
   • The policy must be issued by a life insurance company operating in Thailand.
   • Annual cash returns or payouts cannot be more than 20% of the annual premium.
   • If the spouse has no income, his/her premiums can be deducted up to an additional THB 10,000.
2. Health Insurance Premiums: These are tax-deductible up to the actual amount paid, with the maximum being THB 25,000. Once combined with life insurance and endowment insurance premiums, the total deduction must not exceed THB 100,000.
   
   The conditions include coverage provided by a life insurance company or a non-life insurance company operating in Thailand. The coverage must encompass medical expenses due to illness or injury, compensation for disability and loss of organs due to illness or injury, accident insurance specifically covering medical expenses, disability, loss of organs, and bone fractures, critical illness insurance, and long-term care insurance.
3. Health Insurance Premiums for Parents: These are tax-deductible up to the actual amount paid, with the combined maximum being THB 15,000 for both parents. The parents do not have to be of any set age, but they must have annual income of no more than THB 30,000. If multiple children contgribute to paying the premiums, the total deduction must not exceed THB 15,000.
4. Donations: These are tax-deductible up to the actual amount donated, with the maximum being 10% of income after expenses and other deductions. Eligible donations include those to temples, foundations, associations, government educational institutions, or public charities. A list of eligible organizations can be found on the Revenue Department's website.
5. Donations Eligible for Double Deductions: These are tax-deductible up to twice the amount donated, with the maximum being 10% of income after expenses and other deductions. Eligible donations include the following:
   • support for government educational institutions, private schools, private higher education institutions, or high-potential foreign higher education institutions approved by the Cabinet.
   • support for government hospitals or public health institutions.
   • donations made through the e-donation system.
     A list of eligible institutions can be found on the Revenue Department's website.
6. Donations to Political Parties: These are tax-deductible up to the actual amount donated, with the maximum being THB 10,000. Conditions include the following:
   • The donor must be a Thai national.
   • The donation must be supported by a receipt issued by the political party.

EP 3: Tax Allowances for Economic Stimulus Measures

1. Investment in Thai ESG Funds: These are tax-deductible up to the actual amount invested, with the maximum being 30% of taxable income, but not exceeding THB 300,000. The units must be held for at least five years.
   
   The Cabinet has revised the criteria, increasing the maximum deduction from THB 100,000 to THB 300,000, and reducing the holding period from eight years to five years. This change is effective for the period from 1 January 2024 to 31 December 2026.
2. Secondary City Tourism Expenses: These are tax-deductible up to the actual amount spent, with the maximum being THB 15,000. Eligible expenses include tourism services, tour packages, and accommodation in hotels, resorts, or homestays, excluding travel, fuel, or airfare costs. This applies to 55 designated provinces from 1 May to 30 November 2024.
   
   Proof of expenditure must be in the form of a full tax invoice in electronic format through the e-tax Invoice and e-receipt system.
3. Construction Costs for New Residential Buildings: Taxpayers can claim a tax deduction of THB 10,000 for every THB 1 million of actual construction costs, for a total deduction of not more than THB 100,000. This deduction is limited to one new house with maximum construction costs of THB 10 million. The following conditions must be met:
   The construction contract must be executed between 9 April 2024, and 31 December 2025, with stamp duty paid electronically.
   
   • Construction must commence within the same period, from 9 April 2024, to 31 December 2025.
   • Construction expenses must be incurred for payments made to contractors registered for VAT.
   • Taxpayers will be eligible for the tax deduction for construction of a new home in the tax year in which construction is completed. The completion date will be determined based on whichever of the following dates is later: the end date specified in the construction contract; the date on the building permit; or the date on the construction completion notification.