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Department to Raise Tax Deductions

By on Mar 18, 2016 in Property News

The Revenue Department will increase corporate income tax deductions for depreciation and entertainment expenses to alleviate business operators’ tax burden, according to its chief.

The planned adjustment seeks to make deductible expenses better reflect the current situation with the aim of encouraging business operators to pay their tax bills accurately, director-general of the Revenue Department Prasong Poontaneat said without revealing what the new rates are or when they will be introduced.

The current tax deductible rate for the depreciation of company cars is too low, he said. According to the department, the tax depreciation of company cars or buses with no more than 10 seats is capped at 20% of up to 500,000 baht.

Regarding entertainment expenses, the Revenue Department currently allows companies to deduct up to 0.3% of gross receipt, not exceeding 10 million baht.

Separately, Mr Prasong said 430,000 small and medium-sized enterprises (SMEs) had registered with the Revenue Department’s scheme aimed at drawing SMEs into the formal tax system and discouraging then from understating income and tax bills.

Under the single financial account scheme, registering with the department is required for SME operators who plan to take part in the programme. The registration period ended yesterday.

SMEs with annual sales of up to 500 million baht that register with the department will be exempt from backdated tax scrutiny.

Registered SME operators with registered capital not exceeding 5 million baht and revenue of 30 million or less for the 2015 accounting year will face no tax bill for the 2016 accounting year, only 10% corporate tax for net profits exceeding 300,000 baht for the 2017 accounting year and tax exemption for net profit of no more than 150,000 baht.

They will resume paying the normal rates from 2018. SMEs are currently exempt from corporate taxes for net profit of no more than 300,000 baht, but pay 15% tax for net profit of 300,0001 to 3 million baht and 20% for net profit of more than 3 million.

Source: Bangkok Post – 15 March 2016

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