Tax deduction rights for personal income tax payers

     Taxes are a means by which the government collects from its citizens who have an income according to certain criteria, in order to use the funds for the development of various areas of the country. It is the responsibility of Thais to file personal income tax every year. 

     Those who meet the criteria to file taxes must properly and completely compile the necessary documents for quick tax consideration. By law, certain expenses can be claimed as tax deductions, deducted from the income after deducting expenses before tax calculation. Thus, tax deduction rights for individual income earners are another factor in tax calculation, considered by the state as a responsibility or a special right that the state wants to support, to encourage certain behaviors among citizens. This may be revised or improved every year, so taxpayers should frequently follow up on the criteria and conditions for each year to plan for tax deductions correctly and appropriately.

The methods for deductions vary as follows:

(1) In the case of an individual or a person who died during the tax year

1. An income earner can claim a deduction of 60,000 Baht.

2. A spouse (without income) can claim a deduction of 60,000 Baht.

3. Income earners or spouses from different parties can claim a total deduction not exceeding 120,000 Baht.

4. Legal and adopted children can claim a deduction of 30,000 Baht per child, with the following conditions:

• • Legal children can be claimed without a limit on the number.
  • Adopted children can be claimed, up to a limit of 3 children.
  • In the case of having at least 3 surviving legal children, adopted children cannot be additionally claimed.
  • In the case of having less than 3 legal children, adopted children can be claimed in addition to the legal children, but the total number must not exceed 3 children.

Children claimed for deduction should not have income exceeding 30,000 Baht and meet the following criteria:

• • Being underage
  • Being under 25 years old and studying at the university or tertiary level
  • Being a person who is ordered by the court to be incapable or quasi-incapable and is dependent. The number of children is counted only for surviving children, in the order of the oldest child, including children who meet the criteria for deduction.

5. Care expenses for parents aged 60 years and above and dependent on the income earner can be claimed. Parents should have an assessable income in the tax year of the requested deduction not exceeding 30,000 Baht. The deduction can be claimed at 30,000 Baht per person and can also claim a deduction for the parents of the spouse at 30,000 Baht per person.

6. Care expenses for disabled or incapacitated persons, a deduction of 60,000 Baht per person can be claimed.

7. Life insurance premiums (for policies that are 10 years or older) of the income earner can be tax deductible and exempt from income tax, but not exceeding 100,000 Baht. If a couple has life insurance and maintains their marital status throughout the tax year, the income earner can claim a deduction for the life insurance premiums of the spouse who has no income, up to the actual amount paid but not exceeding 10,000 Baht. If both spouses have income:

(A) If the marital status has not been maintained throughout the tax-exempt year, both the husband and wife who are income earners are entitled to tax exemption on the actual amount paid, specifically the amount exceeding 10,000 Baht but not exceeding 90,000 Baht, which does not exceed each person's assessable income after deducting expenses under Sections 42 Ter to 46 of the Revenue Code.

(B) If the marital status has been maintained throughout the tax-exempt year and the wife does not separately declare and pay tax from the husband under Section 57 bis of the Revenue Code, both the husband and wife who are income earners are entitled to tax exemption on the actual amount paid, specifically the amount exceeding 10,000 Baht but not exceeding 90,000 Baht, which does not exceed each person's assessable income after deducting expenses under Sections 42 Ter to 46 of the Revenue Code.

(C) If the marital status has been maintained throughout the tax-exempt year and the wife separately declares and pays tax from the husband under Section 57 bis of the Revenue Code, both the husband and wife who are income earners are entitled to tax exemption on the actual amount paid, specifically the amount exceeding 10,000 Baht but not exceeding 90,000 Baht, which does not exceed each person's assessable income after deducting expenses under Sections 42 Ter to 46 of the Revenue Code.

8. Premiums for health insurance of the parents of the income earner and spouse can be deducted up to the actual amount paid, but not exceeding 15,000 Baht. The parents of the income earner and the spouse must not have an assessable income in the tax year that exceeds 30,000 Baht.

9. Payments into a provident fund can be deducted up to the actual amount paid in the tax year, but not exceeding 10,000 Baht. The amount exceeding 10,000 Baht but not exceeding 490,000 Baht, which does not exceed 15% of the wage, can be deducted from income.

10. Investment in units of a Retirement Mutual Fund (RMF) can be exempted up to the amount paid for the units in the RMF under the Securities and Exchange Act, at a rate not exceeding 30% of the assessable income that is taxable in that tax year. This, combined with annuity life insurance premiums, contributions to a provident fund, contributions to a government pension fund, contributions to a welfare fund under the Private School Act, and contributions to the National Savings Fund, must not exceed 500,000 Baht.

11. Life insurance premiums for pension insurance: The tax deduction is 15% of the taxable income each year but not more than 200,000 THB per year. This must be a pension life insurance policy that provides coverage for at least 10 years and pays pension benefits when the income earner is aged 55 to 85 years or older. Along with contributions to the provident fund, contributions to the Government Pension Fund of Thailand (GPF), contributions to private school welfare funds, investments in retirement mutual funds (RMF), and contributions to the National Savings Fund, it should not exceed 500,000 Baht.

12. Contributions to the National Savings Fund: It can be deducted according to the actual amount paid, but not more than 500,000 Baht. Together with pension life insurance premiums, provident fund contributions, GBH contributions, contributions to private school welfare funds, and investments in RMF, it should not exceed 500,000 Baht.

13. Purchase of investment units in a Super Savings Fund (SSF): The tax deduction equals the actual amount paid, but not more than 30% of the assessable income received which is subject to income tax for that year, and not exceeding 200,000 Baht.

14. Interest on loans paid to banks or other financial institutions, life insurance companies, cooperatives, or employers for purchasing, hiring purchasing, or constructing residential buildings, by mortgaging the purchased or constructed building as loan collateral: Deductions can be made for the actual amount paid, but not more than 100,000 Baht.

15. Social Security contributions: The tax deduction equals the actual amount paid, but not more than 200,000 Baht.

16. Health insurance premiums: The tax deduction equals the actual amount paid, but not more than 25,000 Baht. However, when combined with life insurance premiums for life insurance policies of at least 10 years, it should not exceed 100,000 Baht. This applies to premiums paid from January 1, 2020 onwards.

17. Donations:

• • Donations supporting education, sports, and social development: The deduction is double the actual amount paid, but not more than 10% of income after deducting expenses and other deductions.
  • Donations made via electronic systems (e-Donation): The deduction is double the actual amount paid, but not more than 10% of income after deducting expenses and other deductions.
  • General donations: The deduction equals the actual amount paid, but not more than 10% of income after deducting expenses and other deductions.
  • Donations to political parties: The deduction equals the actual amount paid, but not more than 10,000 THB.

18. Purchase and installation of closed-circuit television systems: The tax deduction equals the actual amount paid (only for income according to Article 40 (5) (6) (7) (8) in the Special Development Zone only).

19. Maternity expenses and childbirth costs: The tax deduction equals the actual amount paid, not exceeding 60,000 Baht per occasion.

20. Investment in shares or being a shareholder to establish or increase capital in a company or partnership registered as a social enterprise and declared to be a social enterprise: The tax deduction equals the actual amount paid, but not more than 100,000 Baht.

21. Purchase of goods or services, “Shop Dee Mee Kuen”: The tax deduction equals the actual amount paid, but not more than 30,000 Baht. This includes the purchase of goods or services from VAT-registered businesses with tax invoices, purchase of books, electronic book services via the internet (e-books), and purchases of One Tambon One Product (OTOP) goods.

(2) For an ordinary partnership or unincorporated group of persons, each can deduct 60,000 Baht, but the total deduction cannot exceed 120,000 Baht.

1. Money donated to support education and sports can be deducted at twice the actual amount paid, but not more than 10% of the income after deducting expenses and allowances.

2. Donations can be deducted at the actual amount paid, but not more than 10% of the income after deducting expenses and allowances.

(3) In the case of an undivided estate, a deduction of 60,000 Baht can be made.

1. Money donated to support education and sports can be deducted at twice the actual amount paid, but not more than 10% of the income after deducting expenses and allowances.

2. Donations can be deducted at the actual amount paid, but not more than 10% of the income after deducting expenses and allowances.

Data updated on February 13, 2023

Source: The Revenue Department, 90 Phaholyothin 7, Phayathai, Phayathai, Bangkok 10400

Tel. +66 2272 8000

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