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Published on March 5, 2008

"These measures will reduce individuals' tax burden and promote long-term savings. They're also aimed at boosting private investment in line with the 'Investment Year' policy, which will restore economic confidence in the long run," the Finance Ministry said in its proposal to the Cabinet.

"A drop in government revenue is expected in the first year, but an expansion in the economy and individual disposable income will boost consumption and spur private investment, increasing government revenue," it said.

All tax-related measures take effect this year, as follows:

• Boosting disposable income and assisting the underprivileged.

Individuals with taxable income of less than Bt150,000 are exempt from income tax, up from the current threshold of Bt100,000.

Individuals can deduct up to Bt100,000 of their life-insurance premiums, up from Bt50,000.

The maximum deductible limit for provident, retirement mutual and pension funds and contributions to private schools is raised from Bt300,000 to Bt500,000.

Deductible investment in long-term equity funds is raised from Bt300,000 to Bt500,000.

Individuals whose parents, children or spouses are physically impaired can deduct expenses of up to Bt30,000 a year.

• Promoting SMEs and community enterprises.

Businesses with taxable income of less than Bt1.2 million are exempt from income tax.

Corporate taxpayers with no more than Bt5 million in paid-up capital are exempt from taxes for the first Bt150,000 in net profit. Additional profits are subject to the following progressive rates: less than Bt1 million, 15 per cent; at least Bt1 million but less than Bt3 million, 25 per cent; and more than Bt3 million, 30 per cent.

• To promote investment and strengthen competitiveness.

Individuals and companies can deduct up to 1.25 times their actual investment in energy-saving equipment procured by December 2010.

Companies can depreciate 40 per cent of the cost of machinery and equipment on their delivery date for items acquired by December 2010.

Companies can depreciate computer software over three accounting years.

Companies with fixed assets, excluding land, worth no more than Bt200 million and with no more than 200 employees can depreciate up to 40 per cent of the cost of software on the delivery date. The rest can be depreciated over three accounting years. They can also expense up to 100 per cent of the cost of an asset for a total cost not exceeding Bt500,000 on assets acquired by December 2010.

Companies listing in the Market for Alternative Investment (MAI) are entitled to a 20-per-cent corporate income tax rate instead of the normal 30-per-cent rate for three accounting years after listing. Those listing on the Stock Exchange of Thailand are entitled to a 25-per-cent tax rate for three years.

The privileges are for companies submitting listing applications between January 2008 and December 2009 for listing by December 2009.

Companies already listed in the MAI are entitled to the 20-per-cent rate for net profit not exceeding Bt20 million for three years.

Those listed on the main bourse can enjoy the 25-per-cent rate for profits not exceeding Bt300 million for three years.

The special business tax on property transactions, undertaken in a one-year period, is cut from 3 per cent to 0.1 per cent. Property-transfer and mortgage fees are reduced from 2 per cent to 0.01 per cent.

The 0.01-per-cent fee is also applicable to the transfer of office buildings.

The Nation