Tax benefits to business operators for preparation of electronic tax invoice/ receipt and tax remittance via electronic system

In order to support business operators during this digital era, a law has been enacted to provide tax benefits to business operators for preparation of electronic tax invoice/receipt and tax remittance via electronic system, in accordance with the criteria prescribed by Royal Decree (No. 718) B.E. 2564 (2021). Such law comes into force as of 27 May 2021¹; the details of which are as follows:

• Provides definitions of “electronic tax invoice/ receipt/ certificate”; “electronic data preparation/ receipt/ submission system”; “electronic certificate collecting device/storage”; “service provider for preparation/submission of electronic data”; and “service provider of tax remittance”².
   
• Grants an exemption on income tax in the amount of 100 percent of the actual expenses paid to a company or juristic partnership from 1 January 2020 to 31 December 2022, as follows:
   
  2.1 Expenses for investing in electronic data preparation system or purchasing a computer program, device for electronic certificate storage, computer or any other device used in conjunction with a computer with the purpose to be used in preparation, submission, receipt or storage of electronic tax invoices or electronic receipts for its own business; but not repairing such in order to maintain its present condition under Section 65 ter (5) of the Revenue Code. However, expenses that are excluded include expenses of a service provider for electronic data processing; service provider for electronic data submission; and computer program developers for selling or providing a service to others³.
   
  2.2 Expenses for investing in the tax remittance system or purchasing a computer program, device for electronic certificate storage, computer or any other device used in conjunction with a computer with the purpose to be used in tax remittance for a service provider and the business of the person subject to the remittance of withholding tax, income tax or VAT according to Section 3 quinque of the Revenue Code, excluding expenses for repairing such to maintain its present condition⁴.
   
  2.3 Expenses for a service fee paid to a service provider for electronic data processing or electronic data submission; a service fee for an electronic certificate; or a service fee for using electronic data storage that has been paid for preparation, submission, receipt or storage of electronic tax invoices or electronic receipts. This also includes expenses for a service fee paid to a service provider for tax remittance, service fee for an electronic certificate or service fee for electronic data storage paid for the remittance of withholding tax, income tax and VAT under Section 3 quinque of the Revenue Code⁵.
   
• In order to fully qualify for tax exemption under Clause 2.1 and 2.2 above, the assets must be in the following conditions:⁶
   
  3.1 Such assets must be unused;
  3.2 In order to deduct wear and tear depreciation, the assets must be acquired and in ready-to-use condition by 31 December 2022;
  3.3 Such assets are in Thailand;
  3.4 Such assets must be useable for at least three consecutive accounting periods from the first accounting period in which such assets are ready to be used;
  3.5 Such assets are not be used in order to receive tax benefits under other Royal Decrees issued under the Revenue Code; and
  3.6 Such assets are not be used in businesses that are entitled to Board of Investment (BOI) promotion, law on Competitiveness Enhancement for Target Industries or law on the Eastern Special Development Zone (EEC).

In this regard, please follow the rules, procedures and conditions announced by the Director-General, which the law will be announced later.

• ¹ Section 2 of Royal Decree (No. 718) B.E. 2564 (2021)
• ² Section 3 of Royal Decree (No. 718) B.E. 2564 (2021)
• ³ Section 4 of Royal Decree (No. 718) B.E. 2564 (2021)
• ⁴ Section 5 of Royal Decree (No. 718) B.E. 2564 (2021)
• ⁵ Section 7 of Royal Decree (No. 718) B.E. 2564 (2021)
• ⁶ Section 6 of Royal Decree (No. 718) B.E. 2564 (2021)