Tax incentives for donations to support education extended

Keywords: Mazars, Thailand, Tax, Donations, e-donation, Education, Royal Decree, Revenue Code, Ministry of Finance, United Nations, Thai government

14 July 2020

The period for granting tax incentives under the tax measures to support education under Royal Decree No. 681 of the Revenue Code ended 31 December 2019. However, in order to encourage the private sector to continue to participate in the promotion and development of education, the Ministry of Finance proposed extending for two years the period during which those tax incentives could be granted, which would be 1 January 2020 to 31 December 2021. The tax incentives shall be granted only for donations made through the e-donation system of the Revenue Department.

Tax incentives shall be granted for donations made to the following educational institutions:

• government institutions,
• private higher education institutions in accordance with the law on private higher education institutions, and
• private schools under the law on private schools.

This does not include informal schools under the law on private schools and educational institutions established in Thailand in accordance with treaties or agreements between the Thai government and specialized agencies of the United Nations.

The principles and guidelines for the tax incentives are as follows:

1. Individuals can claim a deduction of twice the actual amount of money donated. However, the amount of the deduction, when combined with provisions set out in other Royal Decrees on donations, must not exceed 10% of assessable income after the deduction of expenses and other deductions.

2. Companies or legal partnerships that donate money or assets to the educational institutions listed above can also deduct twice the amount donated. However, when combined with the cost of constructing and maintaining playgrounds, parks, or private or governmental sports fields, as well as provisions set out in other royal decrees on donations, the deduction must not exceed 10% of the net profit before the deduction of expenses for public charities or for public benefit, and expenses for education or sports under Section 65 ter of the Revenue Code.

3. An exemption from income tax, VAT, specific business tax, and stamp duty shall be granted to individuals, companies, or legal partnerships for income derived from the transfer of assets or the sale of goods or on an instrument executed for donations to the educational institutions listed above. However, the transferor must not deduct the cost of the assets or goods that are exempt from those taxes as expenses when calculating personal income tax or corporate income tax.