Thailand: Tax benefits extended, promoting digital transformation of SMEs

Tax benefits to encourage SMEs to transform their businesses to reflect the digital economy

Tax benefits to encourage SMEs to transform their businesses to reflect digital economy

The Thai Cabinet on 11 May 2021 approved a draft Royal Decree to extend tax benefits previously provided to small and medium enterprises (SMEs) to encourage them to transform their businesses to reflect the digital economy.

Companies or juristic partnerships will be allowed to deduct 200% of the amount of expenses (up to a maximum expense value of THB 100,000) for the purchase or development of, or license to use computer programs or software that are registered with the Ministry of Digital Economy and Society’s Digital Economy Promotion Agency. This tax benefit applies for accounting periods beginning on or after 1 January 2021 through 31 December 2022.

To qualify for this tax benefit, certain conditions must be met:

  • Companies or juristic persons must not have paid-up capital exceeding THB 5 million on the last day of the accounting period in which the expenses are incurred.
  • Income derived from the sale of goods and the provision of services does not exceed THB 30 million in the accounting period in which the expenses are incurred.
  • Companies or juristic persons that use this tax benefit will not be entitled to any corporate income tax exemptions under certain other regimes or to other tax benefits relating to the same computer programs or software.

The draft Royal Decree defines what are eligible computer programs and software.  The definition also includes “Software as a Service” (SaaS) programs that a user can use on-demand.

Read a May 2021 report prepared by the KPMG member firm in Thailand



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