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.

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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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