Thailand: Tax relief, transfers of secured property to financial institutions to repay loans or debts (COVID-19)

Tax relief for debtors in response to the coronavirus

Tax relief for debtors in response to the coronavirus

The Thai Cabinet in May 2021 approved measures to provide tax relief for debtors that transfer property secured as collateral for a loan to financial institutions as part of the repayment of the loan or debt.

The relief is offered in response to the coronavirus (COVID-19) pandemic.

The transfer of secured property for debt repayment is one of the measures prescribed in an emergency decree (April 2021) and is intended to provide assistance and relief for businesses economically affected by the pandemic. The measures encourage financial institutions to accept the transfer of secured property for debt repayment (pursuant to certain conditions set by the Bank of Thailand).

The tax relief available to debtors and financial institutions for transfers of secured property for debt repayment include:

  • An exemption from individual (personal) income tax and corporate income tax for debtors on income realized from the forgiveness of debt
  • An exemption from individual (personal) income tax, corporate income tax, value added tax, specific business tax, and stamp duty for debtors and for financial institutions with regard to the transfer of secured properties, the sale of goods, and the execution of dutiable instruments arising as a result of the transfer of secured property for debt repayment

In addition, the Cabinet also approved a draft regulation to allow financial institutions to waive the normal procedures required for writing off bad debt from a debtor account for those debts forgiven as a result of the transfer of secured property.

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

 

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