Tax News No. 254 February 2018

Tax News No. 254 February 2018

Index of legal movement in relation to business


The Avoidance of Double Taxation Agreement between Thailand and Cambodia

On the day of 11 st January B.E.2561 (2018) the Director-General of the Revenue Department announced that Double Taxation Agreement between Thailand-Cambodia came into effect on 26 th December B.E.2560 (2017). A taxpayer can exercise tax privileges from 1 st January B.E.2561 (2018) onward. The agreement as stated shall eliminate or reduce the double international burden tax, promote mutual investment between two countries, also improve Thailand to intensify competitiveness income tax desired with others countries; for example, Thai investor shall pay income tax desired, interest or royalty which is obtained from Cambodia on a lower rate than that under the domestic tax law.

This agreement is an agreement for avoidance of double taxation No.61 st between Thai Government and foreign jurisdiction. For further information, please visit the Revenue Department website menu > tax knowledge or call 1161, RD intelligence center for more detail.

Tax measures for relieving impact on minimum wage increase

According to the cabinet meeting on 30 January 2018, the cabinet passed resolution on the draft of Royal Decree issued under Revenue Code on Revenue Exemption (No…) B.E… (Tax measures for relieving impact on minimum wage increase) which shall provide measures for relieving burden of a medium and small company or juristic partnership that is significantly based on labor cost for carrying on its business so that it can have domestic competitive proficiency, and shall provide tax privileges as follows:

  1. An employer who is a company or juristic partnership, earns income derived from total sales of goods and provision of service not exceeding 100 million Baht, and hires not exceeding 200 employees in the income-tax-exemption accounting period can take expenses on daily wages paid to the employees to be deductible expenses. In addition, the deductible expenses shall be 1.15 times daily wages paid to the employees.
    Daily wages mean a wage which is remuneration according to an agreement between the employer and employee in consideration for working under employment during normal daily working. The daily wages do not include overtime pay, allowance, any monetary benefits, tax and duty the payer pays on behalf of the employee, all of which shall be obtained and relevant to employment.
  2. The company or juristic partnership can be exempt from income tax pursuant to these measures if it meets the following rules and conditions:
    1. Current daily wage rate paid to the employees shall be higher than the previous daily wage rate which the company or juristic partnership designated and generally notified or which was paid, to the employees prior to 1 April 2018
    2. There shall be no exercising income-tax-exemption privileges, in whole or in part, for income paid as employment expenses in other cases under Royal Decree issued under Revenue Code.

Thus, the daily wages paid to the employees shall be made payment as of 1 April 2018 until 31 December 2018.

Warning of Call Center gang cheating for tax refund through ATM

The 6th day of February B.E.2561 (2018) the Revenue Department makes a statement that, according to call center gang calling to taxpayer by pretending to be the Revenue Officer asking for inspection of taxation, tax refund including any details about personal information and financial information of taxpayer, then provided the taxpayer to make transactions through ATM causing many taxpayers fall into a trap and lose a lot of money. The Revenue Department has no policy to consent the Revenue Officer to call to taxpayer for inquiring such information. If the Revenue Department has any question or needs an additional document, it shall send a notification letter to a taxpayer individually. And for a person who has withholding tax as exceeding paid, when the officer has finished the document inspection, there shall be tax refund by Prompt pay system which is registered by 13 digits of identification numbers or send as cashier’s cheque mentioning name-surname of a person who has requested for tax refund and send by registered mail following the domicile as inform only. Taxpayer shall not make transaction for receipt of the tax refund through ATM. Furthermore, If taxpayer has a call as pretended to be the Revenue Officer and has a behavior as above. Please do not believe and ask for information at RD intelligence center call. 1161 and the Revenue Office countrywide on business day and time.

Increase of Minimum wages

The Cabinet has passed resolution on the date 30 th January B.E.2561 (2018) as follows:-

  1. To acknowledge the stipulation of minimum wage rate under the notification of Thailand’s Central Wage Committee Subject: Minimum Wage Rate (No.9) on date 19 th January B.E.2561 (2018), there are essence of increasing a minimum wage rate for 8-20 Baht/Day in all provinces divided into 7 ranks as follows:-
Rank Minimum wage (Baht) / Day Number of Provinces Provinces
1 308 Baht / Day 3 Narathiwat, Pattani and Yala.
2 310 Baht / Day 22 Kamphaeng Phet, Chaiyaphum, Chumporn, Chiang Rai, Trang, Tak, Nakhon Si Thammarat, Phichit, Phrae, Maha Sarakham, Mae Hong Son, Ranong, Ratchaburi, Lampang, Lamphun, Si Sa Ket, Satun, Sing Buri, Sukhothai, Nong Bua Lam Phu, Amnat Charoen and Uthai Thani.
3 315 Baht / Day 21 Kanchanaburi, Chai Nat, Nakhon Phanom, Nakhon Sawan, Nan, Bueng Kan, Buri Ram, Prachuap Khiri Khan, Phayao, Phatthalung, Phitsanulok, Phetchaburi, Phetchabun, Yasothon, Roi Et, Loei, Sa Kaeo, Surin, Ang Thong, Udon Thani and Uttaradit.
4 318 Baht / Day 7 Kalasin, Chanthaburi, Nakhon Nayok, Prachin Buri, Mukdahan, Sakon Nakhon and Samut Sakhon.
5 320 Baht / Day 14 Krabi, Khon Kaen, Chiang Mai, Trat, Nakhon Ratchasima, Phra Nakhon Si Ayutthaya, Phangnga, Lop Buri, Songkhla, Saraburi, Suphan Buri, Surat Thani, Nong Khai and Ubon Ratchathani.
6 325 Baht / Day 7 Bangkok, Chachoengsao, Nakhon Pathom, Nonthaburi, Pathum Thani, Samut Prakan and Samut Sakhon.
7 330 Baht / Day 3 Chon Buri, Phuket and Rayong.

To apply for floating wage rate, the Cabinet has assigned to the Ministry of Labour to make analysis on the pros and cons of this wage adjustment that how dose its affect the overall economy in Thailand? And then the Ministry of Finance, the Ministry of Labour, the Ministry of Industry, the Board of Investment, etc shall be assigned to prescribe the measure for counteraction this wage adjustment to all of business persons as well.

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