Thailand: VAT rate reduction, social security contribution rate reduction
Thailand: VAT rate reduction
The Thai Cabinet approved measures to reduce the value added tax (VAT) rate and the social security contribution rates.
The Cabinet approved the proposal from the Ministry of Finance to maintain the reduced VAT rate of 7% for another year. The 7% reduced VAT rate is inclusive of local tax, and would be applicable to the VAT liabilities incurring from the sale of goods, service provisions, and import transactions from 1 October 2020 to 30 September 2021.
The Cabinet also approved a three-month extension of a reduction of the compulsory social security contributions—for September through November 2020. The reduction is intended to aid employers and employees who have been affected by the coronavirus (COVID-19) pandemic. The compulsory social security contribution rates of employers and employees (the insured persons) are reduced to 2% from 5%. The reduced rates apply to each employee’s monthly salary, but not exceeding the maximum salary of Baht 15,000 per employee per month, for the three-month salary cycles from September through November 2020. If the contributions are “over-remitted,” employers or employees can request a refund from the appropriate social security office.
Read a September 2020 report prepared by the KPMG member firm in Thailand
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