Operation Procedure for Green Energy and Green Technology in Thailand

Operation Procedure for Green Energy and Green Technology in Thailand

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Renewable energy (aka “Green energy”) is an energy that can be produced from natural sources. Unlike non-renewable energy (e.g. fossil fuels), green energy will naturally replenish overtime, as well as, produce relatively low level of greenhouse gases with less environmental impact. Common examples of green energy sources are: solar, wind, hydro and geothermal.

This article outlines a few Q&A’s for green energy providers, producers and developers covering basic operational procedures in Thailand, such as; importation, contracts, insurance and patent protection.   

1). Is there any certification needed for green energy related technology or product?

As green energy related products may be considered as industrial products, the importers should check whether their products are officially listed as such. Listed industrial products must comply with the Thai Industrial Product Standards Act (“IPS”) and Ministerial Regulation to conform with the prescribed standard to be allowed for sale in Thailand.

Product details must be presented to the competent officials in order to obtain a license from the Thai Industrial Standards Institute (“TISI”). Once a license is received, the product is then able to clear Thai customs. The standard label must also appear on the products. Lastly, due to the constant changes to the list of products subject to IPS, importers should regularly check the list before importing a particular product.

2). What are the key points on liability, performance and warranties for green energy- related technology or product?

In general, Thai law allows foreign law to govern the contract so long as such foreign law does not contravene Thai public order or good morals. Under Thai law (unless the contract provides otherwise), the seller will be held responsible if the product sold is defective or not functioning as intended. The liability for third party injury is governed by the provisions of wrongful act (tort).

3). Are there any nuances to expect in a contract with a Thai firm in regard to insurance?

There is no special concern in contracting with a Thai firm, except that local insurance policies must conform with the format prescribed by the Thai Insurance Commissioner. Foreign insurance firms operating in Thailand are also subject to the same regulations as Thai insurers.

4). What are the basic import duties and documentation for green energy- related technology or product?

Import duty rates are contained in the Customs Tariff Code which more or less follows the Brussels Nomenclature. List of import documentation in general includes import entry declaration form, bill of lading, invoice, packing list, import license (If any), certification of origin (for import duty reduction/exemption) and other necessary documents as may be required from time to time (e.g. product catalogue).

Companies may also apply for special privileges from the Board of Investment (BOI) for the installation of solar cells.  The privileges comprise the exemption of corporate income tax for certain years and exemption of import duty.

5). As some companies may be owners of green technology related software rather than hardware, is there any patent protection in this regard?

Thai Patent Act Section 9(3) stipulates that a computer system or program (“software”) is not patentable. Despite section 9(3) restriction, it may be possible to patent a software-related invention.  If the software-related invention shows sufficient “technical effects”, it will then be considered as an exception to section 9(3) and become patentable.  Under the current practice, “technical effects” means that the software must be used together with a hardware resource and be able to yield technical results, not merely capable of processing raw data.

All in all, one should consult a patent attorney on this, related description and claims should be carefully analyzed along with an explanatory letter highlighting the technical effects of the invention. Under this method, it is possible to obtain a patent protection for one’s software-related invention.

Our society has been depending on energy for centuries, we use energy to power our houses, phones or businesses. This has led to an ever-increasing demand for energy. To ensure secured and sustainable sources of energy in the future, we must continue to develop new technology to support our energy needs and green energy could be one of the paths forward. The Q&A’s provided herein deal with some of the basic points to keep in mind when operating in Thailand. For more information, please contact: law@ilct.co.th.

By:

Chart Chotiphol

Counsel/Business Development

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Covid-19 Grace Period for Intellectual Property (IP) related Prosecution

Covid-19 Grace Period for Intellectual Property (IP) related Prosecution

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As Covid-19 (“Coronavirus”) continues rampage through the country, Thailand Department of Intellectual Property (“DIP”) will be allowing applicant/owner to file a request for a grace period extending the usual deadline. This grace period is preliminary provided for those who is directly affected by Covid-19. Further explanations are below.

What does this Covid-19 grace period cover?

Everything that is under the administration of DIP, including: patents, petty patents, design patents, trademarks, geographical indications and topography of integrated circuits.

This grace period will apply to all IP related prosecution process, such as: application deadline, opposition deadline, registration deadline, office action deadline or any payment deadline.

Who can apply for this?

The owner/applicant.

How does this work?

For individual, he/she must submit relevant documents showing evidence of sickness and treatment of Covid-19. In short, documents showing that Covid-19 has directly affected the ability to handle IP prosecution.

For company, it must prove that Covid-19 has directly impact and hinder the handling process of the related IP prosecution process. If the CEO or director became ill from Covid-19, he/she can submit related medical document on behalf of the company.   

It is uncertain whether agent/lawyer can make a similar claim. At this time, it would seem that DIP will only allow a request made directly by the applicant/owner.

What are the required documents?

  • Copy of the passport of the affected person (important);
  • Medical certificate showing Covid-19 infection (important);
  • Document proving resident within Covid-19 outbreak areas (important);
  • Document verifying high-risk individual, close proximity of the infected or close proximity to those returning from high-risk areas;
  • Any document that may prove direct impact from Covid-19 outbreak;
  • Document verifying Covid-19 infection or outbreak have ended (important);

It is unclear as to how the Thai examiner/registrar will review these documents. Nonetheless, we have marked the important documents that should be submitted, and we will further discuss with the examiner/registrar if this is the case.

What happen after I submit the documents?

Once submitted, the examiner/registrar will review the request on a case-by-case basis. If approved, the applicant/owner will be granted a 30 days extension from the approval date. On the other hand, if the request is rejected, the applicant/owner can file an appeal within 15 days from the decision date. Once again, it is uncertain as to how DIP will calculate the dates.  

Our recommendation

Avoid applying for a Covid-19 grace period unless it is necessary. Seeing multiple uncertainties, including document criteria, deadline on top of examiner/registrar own discretion, it may not be beneficial for owner/applicant to use this. There are considerable risks involve, if the request should fail it may subsequently cause the related IP matter to lapse.

Overall, we recommend that applicant/owner/agent maintain the formal deadline and prepare ahead of time. Our firm has implemented a work-from-home protocol and we are ready to assist you. If you have further question or concern, please contact ipgroup@ilct.co.th.

By:

Chart Chotiphol

Counsel/Business Development

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Thailand COVID-19 Related Tax & Relief Policies

Thailand COVID-19 Related Tax & Relief Policies

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As of January 26, 2021, the Thai Cabinet has announced a series of tax and relief policies (“Announcement”) in an effort to ease the ongoing economic impacts from COVID-19. The current Announcement includes three main policies, these include (1) Reduction of Land & Building Tax (2) Reduction on Real Estate Related Fee, and (3) Extension to File Tax Return. Further details are listed below.

(1). Reduction of Land & Building Tax

Land and Building Tax payment for the year 2021 shall be decreased by 90% for the following land types:

  1. Land or building for agricultural purpose;
  2. Land or building for residential purpose;
  3. Land or building for other purposes (excluding 1 and 2);
  4. Vacant/unused land or building.

Moreover, the collection of Land and Building Tax for 2021 has also been extended by an additional 2 months. The original tax payment deadline by April 2021 has now been extended to June 2021.

(2). Reduction on Real Estate Related Fee

The transfer registration fee for real estate has been reduced to 0.01% (from previously 2%) and the mortgage registration fee has been reduced to 0.01% (from previously 1%). The mentioned reduction policies shall be valid until December 31, 2021 and shall be eligible for the following:

  1. The purchase of a new residence, including: land with detached house/semi-detached house/row house or commercial building and condominium unit;
  2. Real estate purchase from land developer or registered condominium operator;
  3. Real estate price that does not exceed THB 3,000,000 per unit.

(3) Extension to File Tax Return

  1. Filing of 2020 personal income tax return (i.e. PND. 90 or PND.91) via e-filing system has been extended to June 30, 2021 (from previously March 2021);
  2. Filing of withholding tax return (i.e. PND. 1, PND.2, PND.3, PND.53 or PND. 54) for January – May 2021 via e-filing system has been extended to the last day of the following month (from previously the 7th of the following month);
  3. Filing of value added tax return (i.e. Por.Por. 30 or Por.Por. 36) for January – May 2021 via e-filing system has been extended to the last day of the following month (from previously the 15th for Por.Por. 30 and the 7th for Por.Por 36 of the following month).

All and all, taxpayers are encouraged to stay up to date with the latest relief policies to ensure the full benefits. We will keep you posted on further relief policies announced by the Thai Government. For further inquiry or assistance, please contact law@ilct.co.th.

By:

Chart Chotiphol

Counsel/Business Development

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Thailand: Conditions on International Flights during COVID-19 Pandemic

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To flatten Thailand’s COVID-19 curve, the Civil Aviation Authority of Thailand (“CAAT”) had imposed a ban on all international flight entering Thailand since April 3, 2020. Nevertheless, seeing the stabilization of the local cases and effective social distancing protocol for the past months, Thailand will be resuming international flight, effective from July 1, 2020.

According to CAAT’s Notification re: Conditions for International Flight Permit to Thailand, CAAT has stipulated several conditions for special flights and passenger flights inbound for Thailand.

To flatten Thailand’s COVID-19 curve, the Civil Aviation Authority of Thailand (“CAAT”) had imposed a ban on all international flight entering Thailand since April 3, 2020. Nevertheless, seeing the stabilization of the local cases and effective social distancing protocol for the past months, Thailand will be resuming international flight, effective from July 1, 2020.

According to CAAT’s Notification re: Conditions for International Flight Permit to Thailand, CAAT has stipulated several conditions for special flights and passenger flights inbound for Thailand.

1). Special flights

The following types of aircraft are eligible for CAAT’s permission for incoming, outgoing, flyover and/or landing in Thailand:

  • State or military aircraft
  • Emergency landing aircraft
  • Technical landing aircraft (no embarking of passengers)
  • Aircraft on a humanitarian, medical or relief mission
  • Aircraft for repatriation
  • Cargo aircraft

2). Passenger Flights

For passenger aircraft to be given with CAAT’s permission, passengers or persons on board must be one of the following categories:  

  1. Thai nationals
  2. Person invited by the Thai government
  3. Non-Thai nationals, who are spouse, parents or children of a Thai national
  4. Non-Thai nationals holding a valid certificate of residence or permission for residence
  5. Non-Thai nationals holding a valid working permit, including spouse and children of the same
  6. Carriers of necessary goods (must depart immediately after the mission has been completed)
  7. Aircraft crew members (must have a complete travel itinerary)
  8. Foreign students, including parents or guardians of the same
  9. Foreign nationals seeking medical assistance/treatment in Thailand (excluding COVID-19)
  10. Diplomats, international organization representatives or foreign government representatives, including spouse, parents, or children of the same
  11. Foreign nationals with a special arrangement permitted by the Thai authorities

Passenger flights under the above conditions must also adhere to all local regulations (i.e. Thai immigration law, communicable diseases law, air navigation law, and the Emergency Decree on Public Administration in Emergency Situation). Additionally, all passengers must comply with all COVID-19 related screening process (e.g. COVID-19 RT-PCR), as well as, 14-day state required quarantine. Please refer to our previous article on Thailand’s COVID-19 immigration rules, procedures and required documents (see: Immigration Rules)  

We will provide further updates on further regulation, tourism related travel and travel bubble as the information becomes available in the near future. For any assistance, please contact us at law@ilct.co.th.  

By:

Chart Chotiphol

Counsel/Business Development

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Thailand Labour Corner: Impacts of Covid-19 on Employment

Thailand Labour Corner: Impacts of Covid-19 on Employment

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Right and Obligation for Employers and Employees

Confronting Covid-19 pandemic, both employers and employees face many new work-related challenges. Especially with its flu-like symptoms, employers have a duty to implement workplace health, safety and preventative protocols. Likewise, employees are also obligated to act with social responsibility, comply with health guidelines and work rules. This is a two-way street to control and reduce the Covid-19 chain-of-infection.

Under the Communicable Diseases Act B.E. 2558 (2015) (“CDA”), Labour Protection Act B.E. 2541 (1998) (“LPA”) and Occupation Safety, Health and Environment Act B.E. 2554 (2011) (“OSHEA”), both employers and employees should be aware of the below.

What employers should know:
• Employers are required to provide a safe and hygienic working environment, and must carry all related expenses;
• Employers must report all suspected Covid-19 infections within 3 hours upon discovery to related authorities (call “1422”);
• Employers may refer to their employment contract or exercise its managerial rights to request employee to work-from-home;
• Employers should consider special work rules for susceptible employees (i.e. older adults and immunocompromised); and
• Employers are entitled to issue a warning letter of suspension/termination to employee whom was found to violate specific work rules in relation to Covid-19 prevention protocol. For instance, if the work rules restrict traveling to high-risk countries, any action found to be in violation can be a serious ground for suspension or termination.

What employees should know:
• Comply with the health guideline and respect social responsibility. For example, imposing a 14-day self-quarantine after a trip to high-risk country as per the list set by the Ministry of Public Health and World Health Organization for the good of the public;
• Stay home and/or request to work-from-home when sick, but acting in good-faith;
• Employees are entitled to 3 days of sick leave without having to provide a medical certificate;
• Employees are also allowed 30 days of paid sick leave per year; and
• Employees may request voluntarily unpaid leave (upon employer’s discretion).

During these trying times, all must comply with the health guideline to put an end to this pandemic as soon as possible. Regardless of roles, employers and employees have duties to society as a whole. Act in good faith, observe the rules and help one another when needed.

In view of this turmoil, the Thai government is preparing multiple relief policies for both employees and employers, such as: social security contributions by the employers, Vat refund and tax incentives. We will provide further updates once the policies are in effect.

By:

Chart Chotiphol

Counsel/Business Development

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Amendment to Thailand’s Civil & Commercial Code

Amendment to Thailand’s Civil & Commercial Code

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As of June 9, 2020, the Thai Cabinet has introduced an Amendment to Thailand’s Civil & Commercial Code (“Amended CCC”). The Amended CCC was introduced to update both Civil & Commercial Code up to the current practice and standard. The Amended CCC has been approved by the Thai Cabinet and currently in the final stage of pending parliamentary approval.

Below are the key amendments to the Civil & Commercial Code (CCC):

  1. Formation of a partnership limited or company limited may now be applied at any Company and Partnership Registration Office as announced by the Thai minister (Section 1016);
  2. The Thai minister may also waive related fee and reduce the required documents to be submitted in relation to partnerships and limited companies (Section 1020/1);
  3. Memorandum of Association (“MOA”) will become void if a limited company fails to be established within a three-year period;
  4. MOA that had been registered prior to the enforcement of the Amended CCC and had exceeded the three-year period shall be granted a 180 days extension from the effective date of the Amended CCC, the said MOA will become void if it passes the extension period;
  5. Companies which have company seals must affix their company seals on all share certificates (Section 112);
  6. In support of the social distancing guideline (“New Normal”), the Board of Directors’ meeting may now be held without having to be present in person or in the same venue (unless restricted by company’s Articles of Association).
  7. Following (6), New Normal meeting must comply with all related Ministerial Regulations (i.e. Security Standard for Electronic Meetings issued by Thailand Ministry of Digital Economy and Society) and once complied, directors attending the Board of Directors’ meeting via electronic means shall be deemed present at the meeting and have the rights to vote (read more on this: here);
  8. Notice of shareholders’ meeting (i.e. Annual General Meeting and/or Extraordinary General Meeting) must be sent to all shareholders whose names are on the company’s share register book via registered mail with acknowledgement of receipt.
  9. Companies with bearer shares must still make an announcement via local newspaper in addition to sending the notice of shareholders’ meeting to all shareholders (Section 1175).

Overall, this Amended CCC was designed to further promote the ease of doing businesses in Thailand. Companies are encouraged to stay-up-to date on the latest amendments and regulations. For further details and updates, please contact us at law@ilct.co.th.  

By:

Chart Chotiphol

Counsel/Business Development

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สรุปสาระสำคัญของร่างพระราชบัญญัติแก้ไขเพิ่มเติมประมวลกฎหมายแพ่งและพาณิชย์

สรุปสาระสำคัญของร่างพระราชบัญญัติแก้ไขเพิ่มเติมประมวลกฎหมายแพ่งและพาณิชย์

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ล่าสุด เมื่อวันที่ 9 มิถุนายน 2563 ที่ประชุมคณะรัฐมนตรีได้มีมติเห็นชอบร่างพระราชบัญญัติแก้ไขเพิ่มเติมประมวลกฎหมายแพ่งและพาณิชย์ ภายใต้หลักการและเหตุผลที่ต้องการลดขั้นตอนของข้อกฎหมายในบางมาตราที่ไม่เหมาะสมกันกับสภาพการณ์ในปัจจุบัน เพื่อให้การดำเนินธุรกิจของทั้งหุ้นส่วนและบริษัท มีความคล่องตัวมากขึ้น และสอดคล้องต่อการนำเทคโนโลยีในปัจจุบันมาใช้ในการปฏิบัติงาน และดำเนินธุรกิจได้มากยิ่งขึ้น อีกทั้งยังเป็นการเสริมสร้างศักยภาพในการแข่งขันของประเทศ เป็นการสร้างภาพลักษณ์ที่ดีในการประกอบธุรกิจในประเทศไทยที่มีความสะดวกรวดเร็ว และง่ายขึ้น ซึ่งจะไปสอดคล้องกับตัวชี้วัดของธนาคารโลก (Word Bank) และเป็นผลดีต่อการประเมินความยากง่ายในการประกอบธุรกิจในประเทศไทย ทำให้มีการพัฒนา และยกระดับความสามารถในการแข่งขันขององค์กรธุรกิจให้ทัดเทียมนานาประเทศ

ลำดับ

สาระสำคัญของร่างพระราชบัญญัติ

หมายเหตุ

1.

กำหนดให้การยื่นขอจดทะเบียนห้างหุ้นส่วนและบริษัท สามารถยื่น ณ สำนักงานทะเบียนหุ้นส่วนบริษัท แห่งใดก็ได้ ตามที่รัฐมนตรีประกาศกำหนด

จะตรงกันกับมาตรา 1016 ที่ได้รับการแก้ไขเพิ่มเติมตามคำสั่งหัวหน้าคณะรักษาความสงบแห่งชาติที่ 21/2560 ลงวันที่ 4 เมษายน 2560 อยู่แล้ว

2.

กำหนดให้รัฐมนตรีมีอำนาจลด หรือยกเว้นค่าธรรมเนียมในการจดทะเบียน การขอตรวจเอกสาร การขอสำเนาเอกสารพร้อมคำรับรอง และค่าธรรมเนียมอื่นๆ ที่เกี่ยวข้องกับห้างหุ้นส่วนและบริษัท

จะตรงกันกับมาตรา 1020/1 ที่ได้รับการแก้ไขเพิ่มเติมตามคำสั่งหัวหน้าคณะรักษาความสงบแห่งชาติที่ 21/2560 ลงวันที่ 4 เมษายน 2560 อยู่แล้ว

3.

กำหนดให้หนังสือบริคณห์สนธิ ที่จดทะเบียนไว้สิ้นผลลง หากมิได้ดำเนินการจดทะเบียนจัดตั้งบริษัทภายในสามปี

ส่งผลดีต่อผู้ประกอบธุรกิจรายอื่นที่ประสงค์จะใช้ชื่อบริษัทที่ซ้ำกับชื่อบริษัท จดทะเบียนของหนังสือบริคณห์สนธิที่สิ้นผลนี้ ต่อไปนี้สามารถนำไปใช้ได้

4.

กำหนดให้มีการประทับตราบริษัทในใบหุ้นทุกใบ เฉพาะในกรณีที่บริษัทมีตราประทับ

เพื่อเพิ่มความชัดเจนของมาตรา 1128 เดิม ตามคำสั่งหัวหน้าคณะรักษาความสงบแห่งชาติที่ 21/2560 ที่ระบุเพียงว่า “ในใบหุ้นทุกๆ ใบ ให้กรรมการอย่างน้อยหนึ่งคนลงลายมือชื่อเป็นสำคัญ”

5.

กำหนดให้การประชุมคณะกรรมการสามารถดำเนินการได้ด้วยเทคโนโลยีอย่างหนึ่งอย่างใด ซึ่งทำให้กรรมการไม่จำเป็นต้องปรากฎตัวในที่ประชุมก็ได้ เว้นแต่ข้อบังคับของบริษัทจะกำหนดห้ามไว้ ทั้งนี้การจัดประชุมดังกล่าวต้องเป็นไปตามหลักเกณฑ์ วิธีการ และเงื่อนไขที่กำหนดไว้ในกฏกระทรวง และให้ถือว่ากรรมการ ซึ่งใช้การติดต่อสื่อสารนั้น ได้เข้าร่วมประชุมกรรมการ และให้นับเป็นองค์ประชุม และมีสิทธิออกเสียงในที่ประชุมด้วย

เพื่อสนับสนุนให้การประชุมคณะกรรมการสามารถดำเนินได้ในรูปแบบการประชุมผ่านสื่ออิเล็กทรอนิกส์ ตามกฎกระทรวงที่จะออกและมีผลใช้บังคับ ซึ่งคาดว่าน่าจะสอดคล้องกับมาตรฐานการรักษาความมั่นคงปลอดภัยของการประชุมผ่านสื่ออิเล็กทรอนิกส์ ที่ออกโดยกระทรวงดิจิทัลเพื่อเศรษฐกิจและสังคม พ.ศ. 2563 ลงวันที่ 12 พฤษภาคม 2563

6.

กำหนดให้การส่งคำบอกกล่าวเรียกประชุมใหญ่ผู้ถือหุ้น ให้ส่งทางไปรษณีย์ตอบรับไปยังผู้ถือหุ้นทุกคนที่มีชื่อในทะเบียนผู้ถือหุ้นของบริษัทเท่านั้น ถือว่าเป็นการส่งคำบอกกล่าวโดยชอบด้วยกฎหมาย เว้นแต่ในกรณีที่บริษัทมีหุ้นชนิดที่ออกให้แก่ผู้ถือ ให้ส่งด้วยวิธีการโฆษณาในหนังสือพิมพ์แห่งท้องที่เพิ่มเติมด้วย

เดิมมาตรา 1175 กำหนดให้ส่งทั้งทางไปรษณีย์ตอบรับ และลงประกาศโฆษณาในหนังสือพิมพ์

7.

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Thailand: COVID-19 Public Health Countermeasures

News & Articles

Communicable Diseases Law and Regulations

As of March 2020, COVID-19 (“Coronavirus”) has spared across to more than 50 countries in every habitable continent with at least 105,000 confirmed cases and raising. Responding to the crisis, the Thai government have made critical efforts to quell this looming threat.

To prevent further outbreaks, public health countermeasures were implemented to reduce the chain-of-infection and spread of Covid-19, of which include restriction, containment and prevention protocols. Effective from March 1, 2020, Covid-19 has been officially classified “dangerous communicable disease” by the National Communicable Disease Committee (“NCDC”). Proceeding this, the Ministry of Public Health has issued an announcement under Communicable Diseases Act B.E. 2558 (2015) (“CDA”) effectively enforcing public health countermeasures against Covid-19 outbreaks.

CDA Need-to-Know:

At present, the World Health Organisation (WHO) and the Thai government have deemed that the following countries are of “high-risks”, these include: Japan, Singapore, South Korea, Italy, China, Hong Kong, Macau, Taiwan, India and Iran. The list is likely to grow in the coming weeks or even days.  

1). Personal Right and Responsibility

Under the CDA, it is expected that all, whether be locals or foreigners to observe social responsibility. As such, all should comply with the following:

  1. Avoid traveling to high-risk countries;
  2. Travelers arriving/returning from high-risk countries should consider a 14-day self-quarantine;
  3. Suspected infection or sign of related respiratory symptoms such as: coughs, sneezing, fever or any flu-like symptoms should be reported immediately;
  4. Follow appropriate health and hygiene guideline (i.e. regularly washes hands etc.); and
  5. Do not panic and refer to official health guideline/announcement.

2). Authorities of Health Officials

In compliance with the CDA, related authorities/officials/communicable disease control officer have the following authorities:

  1. To summon and question suspected individuals;
  2. May request health examination and quarantine specific to the disease’s incubation period (14 days for Covid-19);
  3. May enter domicile, dwelling or buildings (from sunrise to sunset or business hours) for the purpose of inspection, the inspection may continue until it is satisfied;
  4. May request to remove or destroy all suspect contaminated objects/properties;
  5. May order a temporary closure of a place of business, such as: market places, factories, theaters or educational institutions; and
  6. May request examination and quarantine those entering the Kingdom of Thailand.

Failure to comply with the order of a communicable disease control officer will result in fine, imprisonment or both.

In the absence of vaccines and antiviral drugs, public health countermeasures are of utmost important to keep Covid-19 from further spreading. The current restriction, prevention and surveillance protocols are necessary to understanding Covid-19 and ultimately halt the pandemic. The current pandemic forces society to confront many difficult challenges, many of which transcend legal, scientific or ethical implications. Although it is important to respect individual rights, but compliance is necessary to protect the public health interest as a whole.

By:

Chart Chotiphol

Counsel/Business Development

For the full article (PDF) please download hereDownload
Special Tax Deduction & Exemption Schemes

Special Tax Deduction & Exemption Schemes

News & Articles , , ,

As the tax season approaches, the Thai Government has rolled out a series of new tax deduction and exemption schemes for both individual and corporate taxpayers. This is an effort to provide economic relief, as well as to stimulate local economy from the hard-hitting impacts of COVID-19. The tax deduction and exemption schemes are as follows.

(1). Tax Deduction Scheme on Loan Related Interest Payments

Under the current Revenue Code, interest payment(s) of loans for the purpose of rent, lease or construction of residential buildings may be used for the deduction of personal income tax for the year 2021 onwards. To be eligible for this deduction scheme, taxpayers must appropriately present an evidence showing that the loan interest payment(s) had been paid appropriately to the tax authority.

With this being said, an announcement made on 24th December 2020 by Thailand’s Revenue Department (RD) laid down two new regulations to the existing deduction scheme. Stipulated in this new announcement, taxpayers that have made a loan agreement with (1) a bank (2) a finance company, securities company and credit foncier company (3) an insurance company or (4) a secondary mortgage corporation must follow the below regulations: 

  1. For a loan agreement made on or after 1st January 2021 – Taxpayers must declare their intention to apply for the tax deduction scheme to the loan officer for submitting with the tax authority;
  2. For a loan agreement that was made before 1st January 2021 – Taxpayers may choose not to apply for the tax deduction scheme, but still must provide the tax authority with an evidence of loan interest payment issued by the loan officer.

(2). Other Tax Exemption Schemes

Personal Income Tax

Individual taxpayers that have received the benefits from the four governmental programs will be eligible for tax exemption in 2020 and 2021, the mentioned governmental programs are as follows:

  •  Rao-Mai-Ting-Gun (โครงการเราไม่ทิ้งกัน);
  • Tiew-Duai-Gun (โครงการเราเที่ยวด้วยกัน);
  • Kon-La-Krueng (โครงการคนละครึ่ง);
  • KumlungJai (โครงการกำลังใจ).

Corporate Income Tax

Companies may deduct the expenses made on the investment or the service fee of (1) e-Withholding Tax System or (2) e-Tax Invoice & e-Receipt System in the amount of 2 times of the related actual expenses made from 1st January 2020 to 31st December 2022.

Withholding Tax

Tax rate for assessable income (e.g. 3% on service fees, copyright licensing fees or 5% on rental fees etc.) paid via e-Withholding Tax System from 1st October 2020 to 31st December 2022 has now been reduced to 2% tax rate (from the said 3% and 5% tax rates).

Overall, taxpayers are encouraged to pay attention to these deduction and exemption schemes to utilize the benefits to their fullest extent. For any assistance on your tax matters, please contact law@ilct.co.th

By:

Chart Chotiphol

Counsel/Business Development

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Land and Building Tax Regulations & Extensions

News & Articles , , , ,

Effective since March 2019, the Thai government had introduced the Land and Building Tax Act B.E. 2562 (2019) (“LBTA”). The LBTA obligates land and building owners to pay applicable tax. The tax collection process under the LBTA was originally scheduled to commence in January 2020. However, given the implementation difficulties such as: land appraisal and payment process, all applicable deadlines have been extended.      Moreover, the government had also introduced tax reduction scheme for specific land types, as well as, COVID-19 related tax relief.

1). Extension of Land & Building Tax Collection

Due to the current implementation difficulties, all previous LBTA related deadlines were extended for another 4 – 5 months. For instance, deadline for mailing of the tax assessment form has been extended to June 2020 (originally February 2020) and deadline to pay the said tax has been extended to August 2020 (originally April 2020).

Overall, the extension of all related deadlines is designed to provide more breathing room to both the authorities and taxpayers alike.

2). Lands & Buildings Tax Collection Scheme

Under LBTA Section 37, collection of lands and buildings tax are separated into 4 main types, these are:

  1. Land for agricultural purpose;
  2. Land for residential purpose;
  3. Land for other purpose (excluding A and B);
  4. Untendered land.

Each type is subject to their individual tax rate. Land for agricultural purpose is subject to a tax rate of not exceeding 0.15% of the tax appraisal value (excluding aquaculture and textile activities). Whereas land for residential purpose is subject to a tax rate of not exceeding 0.3% of the tax appraisal value. With this being said, specific types of land, such as: those that are pending sale, under an ongoing development project or hotel may be considered as exceptions to the typical tax collection scheme.

Additionally, the Thai cabinet has introduced and approved COVID-19 land & building tax relief scheme, which took effect on June 10, 2020. This tax relief scheme is designed to provide additional tax relief during COVID-19 pandemic. Under the COVID-19 land & building tax relief scheme, taxpayers are eligible for a 90% reduction to the usual appraised value for the 2020 tax payment covering all land types.

3). Lands & Buildings Tax Exemptions

The LBTA also provided additional tax exemption to the taxpayers for the first home and/or agricultural land. A first home including land owned by an individual with an appraised value under THB 50,000,000 is eligible for tax exemption. Primary residential building excluding land (e.g. apartment or condominium) with an appraised value under THB 10,000,000 is also eligible for tax exemption.

Moreover, agricultural land owned by an individual within a designated agricultural area with an appraised value under THB 50,000,000 is also exempted. However, the same with an appraised value over THB 50,000,000 will only be eligible for 3 years tax exemption (2020 – 2022).

4). Lands & Buildings Tax Reductions 

Lastly, the Royal Decree Re: Reductions on Land and Building Tax B.E. 2563 (2020) was introduced to further clarify and prescribe tax reduction rates and requirements for each land type.

Taxpayers should be attentive to the applicable reduction rates and their respective requirements to ensure maximum tax reduction. For example, a land owned via inheritance and used for residential purpose is eligible for 50% tax reduction, but it must be owned by an individual along with a valid inheritance transfer before March 13, 2019. Furthermore, land under development for home plus land, apartment complex or industrial estate are typically eligible for 90% tax reduction for 3 years from the initialization of the development project.

In the same way, schools, sporting venues, entertainment venues, zoos and airfields are typically eligible for 90% tax reduction, but without a fixed period. Nonetheless, these land types must comply with their respective laws and regulations to be eligible for such reduction.

Seeing multiple regulations, exemption and reduction scheme, taxpayers are encouraged to stay up-to-date and be attentive to fully utilize the benefits and remain in compliance with applicable laws. For more information on the latest land and tax regulations, please contact law@ilct.co.th.

By:

Chart Chotiphol

Counsel/Business Development

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