Managing your tax costs for the reporting year 2015
Oct 27, 2015 20:51:24 GMT 7
realisedurgency likes this
Post by Fletchsmile on Oct 27, 2015 20:51:24 GMT 7
Most of it shouldn't be new to Big Mango members, but a timely reminder nonetheless 
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Managing your tax costs for the reporting year 2015
Published: 27/10/2015 at 03:26 AM
Newspaper section: Business
As we have entered the final quarter of the year, now is a good time to review your current tax status to make sure you don't miss out on any changes that could help you to minimise your 2015 tax liability. What should you look for?
First, claiming travel expenses in Thailand this year can reduce your taxable income by a maximum of 15,000 baht. But the expense must be for hotel accommodation to a hotel operator under the law governing hotels for domestic tourism or a service fee paid to a tourism business operator and guide under the law governing tourism businesses. Details on the receipt are very important -- they must clearly state your name, the amount spent and date of issue, which needs to be no later than Dec 31.
A double deduction allowance is available until year-end for donations made to an educational or sports projects approved by the Education Ministry. Check with www.rd.go.th to see whether the organisation or school you wish to support is listed and approved.
For those who have made investments in long-term equity funds (LTFs), retirement mutual funds (RMFs) or pension life insurance, check the amount you're entitled to invest in 2015. Current laws allow you to invest up to 15% of your current year's taxable income but to a maximum of 500,000 baht.
You cannot include in your calculation the exempted income derived from capital gains paid from an LTF or RMF. Be sure of your position before you invest in a fund, otherwise you may face a higher tax liability than you expected this year, and it would cost you more to sell such an investment. This is because capital gains from the sale of a non-qualifying investment will not be exempt income.
There are now more savings opportunities through a provident fund. There are two developments in this regard:
1. Decide how much you want to contribute to the fund. A provident fund not only is for long-term savings but also represents savings for your current tax year. And note one important change -- effective Nov 9, an employee can start contributing more than his or her employer's portion to a provident fund. With no such restriction, the amount of an employee's savings should increase due in part to tax savings. Note that the contribution rates remain unchanged -- 2-15% of wages but capped at 500,000 baht per year.
Tips for employees: Ensure you know your average monthly expenses, otherwise it could affect your cash flow management. This is because changes in contribution rates can be made throughout the year, with the number of times specified in the employer's provident fund policy. Check with your human resources department.
2. Consider how you wish to plan for a tax-free payout made by a provident fund if you move to a new company or transfer your fund to a new employer's fund. Since the purpose of a provident fund is long-term savings for retirement, laws grant the employee the right to plan in advance for the tax-free payout.
Before resigning or leaving a company, you must ask the fund manager to maintain your membership in your current fund. Then after your move, you must transfer your portion to your new employer's provident fund as soon as possible. And you should note the following:
By law, the duration of membership in your current fund before transferring to a new fund should not be more than one year, otherwise membership in the prior fund will become invalid. If this happens, only your membership in the new fund will be recognised.
If applying for or enjoying special tax calculation method under Section 48(5) on a one-time payment (severance pay) when leaving an employer but holding and transferring your provident fund portion to a new employer's fund, the year of membership with the ex-employer's fund will automatically become invalid. The new fund manager will start counting your membership status from the date you join the new fund.
Expat tax savings: Finally, an expat who works for an international headquarters (IHQ) can enjoy a flat rate of 15% withholding tax, subject to conditions, for up to 15 years. Compared with the normal progressive personal income tax rates of zero to 35%, the savings could be substantial if the expat is in a high tax bracket. This is a major consideration for a company that absorbs its expat employees' tax liability.
IHQs are the third component of the government's regional operating headquarters (ROH) programme comprising scheme I and scheme II. The expat tax rate is the same for all three schemes, but the validity period is different -- four years for an IHQ, eight years for ROH I and 15 years for ROH II. The period for tax privileges is up to 23 years, depending on the type of entity or business function in which the expat is employed.
Jiraporn Chongkamanont is a director and practice leader at PwC International Assignment Services (Thailand). We welcome your comments at leadingtheway@th.pwc.com
www.bangkokpost.com/business/news/744804/managing-your-tax-costs-for-the-reporting-year-2015
==========================================
Managing your tax costs for the reporting year 2015
Published: 27/10/2015 at 03:26 AM
Newspaper section: Business
As we have entered the final quarter of the year, now is a good time to review your current tax status to make sure you don't miss out on any changes that could help you to minimise your 2015 tax liability. What should you look for?
First, claiming travel expenses in Thailand this year can reduce your taxable income by a maximum of 15,000 baht. But the expense must be for hotel accommodation to a hotel operator under the law governing hotels for domestic tourism or a service fee paid to a tourism business operator and guide under the law governing tourism businesses. Details on the receipt are very important -- they must clearly state your name, the amount spent and date of issue, which needs to be no later than Dec 31.
A double deduction allowance is available until year-end for donations made to an educational or sports projects approved by the Education Ministry. Check with www.rd.go.th to see whether the organisation or school you wish to support is listed and approved.
For those who have made investments in long-term equity funds (LTFs), retirement mutual funds (RMFs) or pension life insurance, check the amount you're entitled to invest in 2015. Current laws allow you to invest up to 15% of your current year's taxable income but to a maximum of 500,000 baht.
You cannot include in your calculation the exempted income derived from capital gains paid from an LTF or RMF. Be sure of your position before you invest in a fund, otherwise you may face a higher tax liability than you expected this year, and it would cost you more to sell such an investment. This is because capital gains from the sale of a non-qualifying investment will not be exempt income.
There are now more savings opportunities through a provident fund. There are two developments in this regard:
1. Decide how much you want to contribute to the fund. A provident fund not only is for long-term savings but also represents savings for your current tax year. And note one important change -- effective Nov 9, an employee can start contributing more than his or her employer's portion to a provident fund. With no such restriction, the amount of an employee's savings should increase due in part to tax savings. Note that the contribution rates remain unchanged -- 2-15% of wages but capped at 500,000 baht per year.
Tips for employees: Ensure you know your average monthly expenses, otherwise it could affect your cash flow management. This is because changes in contribution rates can be made throughout the year, with the number of times specified in the employer's provident fund policy. Check with your human resources department.
2. Consider how you wish to plan for a tax-free payout made by a provident fund if you move to a new company or transfer your fund to a new employer's fund. Since the purpose of a provident fund is long-term savings for retirement, laws grant the employee the right to plan in advance for the tax-free payout.
Before resigning or leaving a company, you must ask the fund manager to maintain your membership in your current fund. Then after your move, you must transfer your portion to your new employer's provident fund as soon as possible. And you should note the following:
By law, the duration of membership in your current fund before transferring to a new fund should not be more than one year, otherwise membership in the prior fund will become invalid. If this happens, only your membership in the new fund will be recognised.
If applying for or enjoying special tax calculation method under Section 48(5) on a one-time payment (severance pay) when leaving an employer but holding and transferring your provident fund portion to a new employer's fund, the year of membership with the ex-employer's fund will automatically become invalid. The new fund manager will start counting your membership status from the date you join the new fund.
Expat tax savings: Finally, an expat who works for an international headquarters (IHQ) can enjoy a flat rate of 15% withholding tax, subject to conditions, for up to 15 years. Compared with the normal progressive personal income tax rates of zero to 35%, the savings could be substantial if the expat is in a high tax bracket. This is a major consideration for a company that absorbs its expat employees' tax liability.
IHQs are the third component of the government's regional operating headquarters (ROH) programme comprising scheme I and scheme II. The expat tax rate is the same for all three schemes, but the validity period is different -- four years for an IHQ, eight years for ROH I and 15 years for ROH II. The period for tax privileges is up to 23 years, depending on the type of entity or business function in which the expat is employed.
Jiraporn Chongkamanont is a director and practice leader at PwC International Assignment Services (Thailand). We welcome your comments at leadingtheway@th.pwc.com
www.bangkokpost.com/business/news/744804/managing-your-tax-costs-for-the-reporting-year-2015
