Maximum amount of tax deductible LTF and RMF units

On 2 July 2015, the Revenue Department issued announcement number 257-259 to expand the definition of the base amount which is used for determining the maximum amount of LTF or RMF units that a taxpayer can buy which is deductible from his taxable income.

Keywords: Mazars, Thailand, Tax, LTF, RMF, Revenue Department, Tax Income

5 August 2015

Individual taxpayers can deduct contributions to LTFs and RMFs from their taxable income.

Contributions to an LTF are tax deductible up to a maximum of 15% of taxable income, or 500,000 baht, whichever is lower.
Contributions to both an RMF and a provident fund together are tax deductible up to a maximum of 15% of taxable income, or 500,000 baht, whichever is lower.

Previously, an individual taxpayer could buy LTF or RMF units not exceeding 15% of his annual “assessable income” for tax deduction. The term “assessable income” in the previous regulation included both taxable income and non-taxable income, such as capital gains from selling shares on the Stock Market of Thailand, statutory severance pay not exceeding 300,000 baht and not exceeding 10 months, and an inheritance.

The new regulation has expanded the term “… of assessable income” to “….of assessable income which is taxable in the tax year.” Therefore, from 1 January 2015, the base amount for determining the maximum amount of LTF or RMF units which can be used for tax deduction will be assessable income after deducting all non-taxable income and tax-exempt income.

For more information (in Thai), please go to Revenue Department Announcement No. 257 and a recent article in Post Today.