The Thai Revenue Department extends the period of tax measures to encourage use of the e-Tax Invoice & e-Receipt, and e-Withholding Tax system for another three years until 31 December 2025

On 24 January 2023,  The Minister of Finance reported that the Thai Cabinet approved to extends the period of tax measures  to encourage widespread use of the e-Tax Invoice & e-Receipt, and e-Withholding Tax systems to promote Thailand’s digital transformation for both the public and private sectors.

The Director-General of the Revenue Department stated that: “The Ministry of Finance, represented by the Revenue Department, recognises the importance of increasing efficiency in tax collection and servicing taxpayers, including increasing the competitiveness of Thailand. The Revenue Department has therefore proposed a draft Royal Decree issued under the Revenue Code on Tax Exemption (No. …….) B.E. ……. extending the period of tax measures to promote investment in electronic tax systems; and the draft Ministerial Regulation No. ……. ( B.E. …….) issued under the Revenue Code on income tax, extending the period of tax measures to encourage the use of electronic withholding tax systems (e-Withholding Tax) as follows:

1. Tax measures to promote investment in the electronic tax system by allowing companies or juristic partnerships to deduct expenses up to twice the actual expenses paid from 1 January 2023 to 31 December 2025 for investment expenses through the e-Tax Invoice & e-Receipt, and e-Withholding tax system, including expenses for the service of such systems.

2. Tax measures to encourage the use of electronic withholding tax systems (e-Withholding Tax) by reducing the withholding tax rate from 5 percent, 3 percent and 2 percent, to 1 percent, for paying assessable income through the e-Withholding tax system from 1 January 2023 to 31 December 2025”.

The Director General of the Revenue Department added that: “Such measures will help the private sector to reduce their costs and the burden of preparing and storing documents, including performance of their tax duties. Moreover, it will help entrepreneurs have more cash flow by reduction of the withholding tax rate during the period in which the measures are effective, which is estimated at approximately Baht 9.8 billion per year. This circulation of money will add value to Thailand’s economic system in the near future.”

In conclusion, taxpayers who prefer to exercise the benefits from the extension of the period under such tax measures must follow the new law and regulations that are due to come into force.

This is intended merely to provide a regulatory overview and not to be comprehensive, nor to provide legal advice. Should you have any questions on this or on other areas of taxation law, please do not hesitate to contact our tax team:

Budhima Kerdsiri
Counsel (Attorney-at-Law)

Hatairat Sukprasert
Associate

Pairaya Yangpaksi
Associate