Extension of Income Tax and Value Added Tax (VAT) Exemption from Donations Given in Support of a Resolution to the Covid-19 Pandemic

On 20 June 2021, the Cabinet of Thailand approved a draft royal decree under the Revenue Code on income tax and value added tax (VAT) exemption from donations given in support of a resolution to the Covid-19 pandemic.

Due to the spread of coronavirus disease (Covid-19), it has significantly and negatively affected the economy of Thailand and other countries around the world. In order to relieve the burden of people, the Thai Government and related agencies have therefore suggested an extension of the tax benefits arising from donations given to the Office of the Permanent Secretary, the Prime Minister’s Office (OPM), in support of a resolution to the Covid-19 pandemic for one more year after expiration of the Royal Decree (No. 701) B.E. 2563 (2020) on 5 March 2021.

The key details of said Royal Decree are as below:

1. Grants an exemption on income tax for donations made via e-Donation between 6 March 2021 to 5 March 2022, as follows:

1.1 For individuals, the tax exemption shall be granted for the assessable income after deduction of expenses and allowances of an actual donated amount in cash. However, when including this amount with other donations in accordance with Section 47 (7) of the Revenue Code, it must not exceed 10 percent of the assessable income after deducting expenses and allowances;

1.2 For juristic persons, the tax exemption shall be granted for the assessable income for an actual donated amount in cash or the value of donated assets. However, when including this amount with the other expenses paid for charity or public benefit in accordance with Section 65 ter (3) (b) of the Revenue Code, it must not exceed 2 percent of net profits; and

2. Grants an exemption on VAT for donations of goods made to the OPM.

Please note that this is a draft law at the moment; therefore, the taxpayer should continue to follow the relevant laws and regulations before and after the law has come into force.