Thailand: Additional tax deduction for investments made before year-end 2016

Thailand: Additional tax deduction for investments

Businesses contemplating increasing their capital asset investments in Thailand need to consider completing the arrangements for the acquisition of (and payment for) the asset before 31 December 2016 so as to take full advantage of an additional tax deduction provided under recent tax law changes.

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Royal Decree No. 604 and a Director-General Notification were issued to provide incentives for capital spending on certain eligible assets, provided that the expenditures for such assets are incurred during the period between 3 November 2015 and 31 December 2016. 

In addition to the standard tax depreciation that normally can be claimed with respect to assets, the costs incurred by taxpayers to acquire, expand, change or improve eligible assets (but not for repairs) can be claimed as an additional tax deduction, to be apportioned over a number of years. 

  • The additional deduction will be spread over a number of years, depending on the nature of the asset, starting with the first year when the asset is ready for use. 
  • Eligible assets include permanent buildings, machinery, parts, equipment, tools, appliances, furniture, computer programs, and vehicles (excluding passenger cars, except when passenger cars are leased out as a normal part of the taxpayer’s business). 
  • The asset must be new and acquired and ready for use by 31 December 2016. 
  • The costs of the asset must actually be paid by 31 December 2016.
  • The asset must be physically located in Thailand, except in the case of vehicles. 

In addition, the asset must not, wholly or partly, be subject to any other tax privilege regime. 


Read a July 2016 report prepared by the KPMG member firm in Thailand

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