As we enter the final quarter of 2024, it’s the perfect time to start preparing for your personal income tax filing. Planning ahead can help you avoid last-minute complications and ensure that all necessary documents and steps are in place by mid-December 2024. This article provides an overview of key deductions and investment opportunities available in Thailand, helping you optimize your tax savings while securing long-term financial benefits.
The basic formula for calculating Net Taxable Income for personal income tax purposes is :
Understanding Income Tax Categories
Personal income tax in Thailand is divided into eight income categories, each with its own specific set of deductions and allowable expenses. To avoid mistakes, it is crucial to consult reliable sources like the Revenue Department’s official website or seek advice from a qualified tax professional.
Types of Tax Deductions
Tax deductions can generally be categorized as follows:
- Marital Status and Family Support deductions related to your marital status, number of children, financial support for parents, or care for a dependent with disabilities.
- Insurance includes health and life insurance for yourself, your spouse, or your parents (and spouse’s parents, if your spouse has no income).
- Investments contributions to investment schemes, such as the Super Savings Fund (SSF), Retirement Mutual Fund (RMF), Environmental, Social, and Governance (ESG) Funds, or annuity plans.
- Special Spending Schemes government programs designed to stimulate domestic spending, such as the e-tax shopping and e-tax travel schemes.
- Donations that are eligible for tax deductions under Thai law.
This article focuses on the use of Insurance and Investments as a tax shield, particularly for SSF, RMF, ESG Funds and Special Government Schemes for Domestic Spending stimulation.
Insurance
- Life and Health Insurance
Life and Health Insurance provided by a Thai insurance company allows for tax deductions, with a maximum of THB 100,000 for life insurance and THB 25,000 for health insurance. However, the total combined deduction for both types of insurance cannot exceed THB 100,000. The maximum deduction for health insurance is THB 25,000.
2. Investments for Savings and Retirement
The total allowable deduction for savings and retirement investments must not exceed THB 500,000 across the following schemes:
3.ESG Funds
To promote environmental responsibility and good governance, the Thai government has approved a tax deduction for ESG Fund investments, with a maximum deduction of THB 300,000, provided the funds are held for a minimum of fully 8 years for purchases made before 2024 & fully 5 years for purchases made between 1st Jan 2024 – 31st Dec 2026
4.Special Government Schemes for Domestic Spending
In 2024, the Thai government has introduced two schemes to stimulate domestic spending:
By understanding and utilising these deductions and investment opportunities, you can effectively manage your tax liability while supporting long-term savings and retirement planning. It’s advisable to review all deductions with a tax advisor to ensure compliance with current laws.
