Mutual fund products for long-term savings
On 3 December 2019, the Cabinet approved mutual fund products for long-term savings.
Keywords: Mazars, Thailand, Tax, Mutual fund, Long-term savings, SSFs, RMFs, LTFs, Ministerial Regulation
24 February 2020
1. Super savings funds (SSFs)
This is a new type of long-term savings fund to replace long-term equity funds (LTFs), which expired at the end of 2019. Tax benefits and conditions of SSFs are as follows:
- Taxpayer can claim a tax deduction for the purchase of SSF units of no more than 30% of gross taxable income, capped at 200,000 baht.
- When combined with other retirement savings funds, such as retirement mutual funds, provident funds, government pension funds, relief funds under the law on private schools, national savings funds or pension life insurance premiums, the total amount of investment in SSF units shall not be more than 500,000 baht in each tax year.
- Taxpayers can sell SSF units after holding them for at least 10 years from the date of purchase.
- There is no minimum purchase requirement. Therefore, taxpayers can invest any amount.
- There is no condition to purchase them continuously. Therefore, investment is not required every year.
- Tax benefits of SSFs will apply from 1 January 2020 to 31 December 2024.
2. Retirement mutual funds (RMFs)
The rules for the purchase of RMF units for personal income tax benefit are revised as follows:
New rules | Old rules |
1. Maximum tax deduction - not exceeding 30% of gross taxable income, and - when combined with other retirement savings funds, such as provident funds, government pension funds, relief funds under the law on private schools, national savings funds, pension life insurance premiums, or SSFs, the total amount shall not exceed 500,000 baht | 1. Maximum tax deduction - not exceeding 15% of gross taxable income, and - when combined with other retirement savings funds, such as provident funds, government pension funds, relief funds under the law on private schools, national savings funds, or pension life insurance premiums, the total amount shall not exceed 500,000 baht |
2. Minimum purchase amount - No minimum purchase amount; and - Must be purchased continuously every year, and purchase cannot be postponed for more than 1 year. | 2. Minimum purchase amount - Shall not be less than 3% of gross taxable income, or not less than 5,000 baht per year, whichever is lower. - Must be purchased continuously every year, and purchase cannot be postponed for more than 1 consecutive year. |
Conditions other than the above remain unchanged.
The above measures will be implemented by drafting a Ministerial Regulation to this effect. The Cabinet has already approved such a draft in principle to be submitted to the Office of the Council of State for review.
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