Times are changing in the world. The Taw.Paw .155/2549 was issued to amend # Taw.Paw.1/2528 and provides guidance on the application of accrual basis for certain kinds of businesses. Here's a list of the major changes from Taw.Paw.1/2528:

Corporate Income Tax

Consignment:
Consignment businesses have to use accrual basis for recognition of income

Lease of property
New provision insert by Taw.Paw. 155/2549 is to allow the lessor and lessee to use accrual basis for recognition of income and expenses

Hire purchase
The important change here is that the profit from hire purchase shall be recognized in the accounting period that the sales take place

Sales of immovable property
An important change was made as businesses now have 3 alternatives (instead of one) to choose for the computation of revenue and expenses

Professional and brokerage services

The change is that the computation of revenue and expenses are now applied as well as generally accepted accounting principle




Value Added Tax (VAT)
• Under Royal Decree No 465, the Revenue Department extended of VAT rate 7% for one more year, from 1 October 2007 to 30 September 2008



Personal Income Tax (PIT)

• Tax relief for gratitude child Taxpayers may deduct their or spouse’s parents’ health insurance premium as allowances for tax purpose at the amount not exceeding 15,000 baht (fifteen thousand baht).
• A premium paid by employers for group insurance policies with a term of up to one year is exempt from personal income tax
• The criteria for enjoying the tax reduction for Retirement Mutual Fund(RMF) has been revised by requiring the tax payer to carry units for a minimum of 5 years and reach 55 years of age so that they will still retain the tax deduction taken in prior period. Prior to this change, the Revenue Dept. allowed the tax payer to sell the units after 5 years of holding, regardless of age which did not serve the purpose of creating retirement savings.
• PIT Allowance for home mortgage interest:the maximum personal income tax (PIT) allowance amount (in the calculation of PIT) will be increased from 50,000 Baht to 100,000 Baht for residence mortgage interest paid to a bank or financial institution, a life insurance company, a cooperative, an employer, the property fund or mutual fund for resolving financial institution problem established under the law governing securities and exchange, a special juristic person or SPV subrogating the above loan creditors, or the Government Pension Fund.

Double Taxation Treaty

• During 2007 ,Thailand is on negotiation for Double Tax Treaty with Estonia and Kenya

Others

• The Revenue Department (RD) increases efficiency of Office of Narcotics Control Board, Anti-Money Laundering Office and Department of Special Investigation by providing on-line information sharing on tax returns. The 3 offices are empowered by special laws to request information from RD. RD implements data confidentiality and security measures using Digital Signatures, Encryption/Decryption and PKI Smart Card Technology that has been upgraded to provide integrated service level.



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