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moreOn Tuesday 4 March 2008, the Cabinet approved the Government’s economic stimulus package for 2008. The package consists of cuts to personal income tax and the taxes for small and medium enterprises, cuts to corporate income tax, and cuts to transaction taxes for the conveyance of property.
Subject to the applicable legislation being drafted and enacted, it is expected that the tax cuts will be back-dated to apply as from 1 January 2008. Summary tables of the announcements (showing the current (2007) rates for comparison) are as follows:
Personal Income Tax Cuts
|
|
Currently |
2008 |
|
Tax-free income |
100,000 |
150,000 |
|
Allowances for disabled child, adopted child, spouse and parents |
0 |
30,000 |
|
Allowance for life assurance premiums |
50,000 |
100,000 |
|
Allowance for contributions to Registered Provident Funds and Retirement Mutual Funds |
300,000 |
500,000 |
|
Allowance for contributions to |
300,000 |
500,000 |
Small and Medium Enterprises
|
|
Currently |
2008 |
|---|---|---|
|
Tax-free income for an SME subject to PIT |
0 |
1,200,000 |
|
Tax-free taxable income for an SME subject to CIT |
0 |
150,000 |
|
Depreciation deduction on date of acquisition of computer software |
0% |
40% |
Corporate Income Tax Cuts
|
|
Currently |
2008 |
|---|---|---|
|
CIT rate for existing companies on the SET for profit below Bt 300m for the first 3 years |
30% |
25% |
|
CIT rate for existing companies on the MAI for profit below Bt 20m for the first 3 years |
30% |
20% |
|
CIT rate for newly-listed companies on the SET for the first 3 years |
30% |
25% |
|
CIT rate for newly-listed companies on the MAI for the first 3 years |
30% |
20% |
|
Allowance for purchase of energy-saving plant and equipment items |
0% |
125% |
|
Depreciation deduction on date of acquisition of plant and machinery for production and services |
0% |
40% |
|
Depreciation allowance for computer software |
10% |
33.33% |
Property Conveyance Taxes
|
|
Currently |
2008 |
|
Specific Business Tax |
3.3% |
0.11% |
|
Transfer Fee |
2.0% |
0.01% |
The information herein was contributed by Steven Herring, an experienced and Senior International Tax Consultant, for RSM Advisory (Thailand) Limited