Tax measures to support the electronic tax system

Keywords: Mazars, Thailand, Tax, Royal Decree, Ministerial Regulation, Revenue Department, Electronic tax system, e-tax invoice, e-receipt, e-withholding tax

16 February 2021

The main contents of the draft Royal Decree and draft Ministerial Regulation are set out below:

1. Draft Royal Decree to extend additional tax deduction on expenses paid for an investment related to the electronic tax system

In June 2019, the Revenue Department issued Royal Decree No. 683 to allow a tax deduction of 2 times (1 time as a normal deduction and 1 time as an additional deduction) expenses actually paid by corporate income taxpayers for investments related to developing an electronic tax invoice (“e-tax invoice”) and electronic receipt (“e-receipt”) system. This additional deduction is applicable to expenses paid from 30 April 2019 to 31 December 2019.

Under the draft Royal Decree, the period for the additional deduction of expenses paid for investments related to developing an e-tax invoice and e-receipt system is extended to the period from 1 January 2020 through 31 December 2022. This also includes expenses paid for:

• investments related to developing an e-withholding tax system;
• the use of an e-tax invoice and e-receipt system of a service provider; and
• the use of an e-withholding tax system of a service provider.

However, it does not include investments related to installing cash registers (Point of Sale: POS).

2.  Draft Ministerial Regulation to extend the period for the withholding tax rate reduction

This draft Ministerial Regulation is an amendment of Ministerial Regulation No. 361 in relation to the period for the reduction of the withholding tax rate from 3% to 2% for the payment of assessable income through the e-withholding tax system. The draft Ministerial Regulation extends the original period (from 1 October 2020 through 31 December 2021) to from 1 October 2020 to 31 December 2022. In addition, it also reduces the withholding tax rate of 5% to 2% for the payment of assessable income through the e-withholding tax system from 1 October 2020 to 31 December 2022.

Therefore, the withholding tax rate reduction under the draft Ministerial Regulation will be as follows: