COVID-19 Updates for Businesses in Thailand
In 2020, the emergence of the COVID-19 pandemic had brought pivotal changes in all businesses across the country. Most companies were forced to close down, while others had to restructure due to the pandemic’s impact. Up until this year, businesses continue to adjust to the ever-evolving economic climate. To help them operate and thrive, the government has implemented initiatives in taxes and financial support.
Indirect and Direct Tax Measures
Since March 2020, the government has launched various tax relief measures to help individuals and businesses during the COVID-19 crisis.
- Corporate Income Tax and Others
Government initiatives on corporate taxes include:
- Deadline extension for filing value added tax (VAT) and withholding tax returns: On the 14th of May, 2021, the Notification of the Ministry of Finance No.5 was issued. This notification grants a deadline extension for online filing and tax payment for the company’s tax returns in July and August. Companies are given until the 30th of July 2021 and the 31st of August 2021, respectively, to pay and file their withholding tax returns, reverse-charge VAT returns, and monthly VAT returns.
- Restructuring of debts: The government has issued tax measures to restructure debts of creditors and financial institutions to assist SME operators and debtors during the pandemic. The debt restructuring must follow the criteria of the Bank of Thailand and must be undertaken between the 1st of January 2021 and the 31st of December 2021.
- Land and Building Tax
To alleviate the economic impact on businesses, the Thai government issued land and building tax reductions to up to 90% in 2021. This incentive covers land in the agricultural, residential, commercial, and vacant categories.
Due to the rise of COVID-19 cases in the country, the Cabinet has approved relief measures to assist employers and employees who have financially suffered because of the pandemic. These include:
- 2,000 THB Cash Transfer
Individuals are eligible for this incentive if they are employed under a private company and have completed the Social Security Fund registration. Those qualified will be given an additional 2,000 THB, which will be given on a two-week instalment basis through the Pao Tang e-wallet application.
- Low-Interest Loan Scheme
This initiative by the Bank of Agriculture and Agricultural Cooperatives and the Government Savings Bank gives low-interest loans to employees receiving regular income, self-employed individuals, and farmers.
The rate is lowered to 0.35% monthly and is applicable for three years. In addition, the initial six instalments are interest-free, wherein the debtor is given leniency not to repay their loans within the same period.
- Contribution Rate Reduction to Skill Development Promotion Fund
Business owners who cannot comply with the skill training requirements of their employees must financially contribute to the fund. However, due to the pandemic, the Ministry of Labour issued a Notification stating the reduced contribution to the fund. According to this Notification, the rate has been reduced to 0.1% (from the original 1%) in 2021.
- Contribution Rate Reduction to the Social Security Fund (SSF)
The Ministry of Labour approved a Ministerial Regulation on the 28th of May, 2021, regarding the Contribution Rate to the SSF. From 5%, the monthly contribution rate for both employers and employees has been reduced to 2.5% from the 1st of June 2021 to the 31st of August 2021.
Other Relief Measures
- To encourage more foreign investments in the country, the Board of Investment (BOI) issued a stimulus package that includes deductions on corporate income tax (CIT) for BOI-approved investments. In addition, the package includes CIT exemptions for digital technology businesses. This package is effective from the 4th of January to the 30th of December 2021.
- An economic relief package has also been issued to improve the business’ liquidity through soft loans issuance. With this package, debtors can use their assets as loan collateral, but they can repurchase them once their financial situation improves. This loan scheme will last for a maximum of five years only.
To know more about government initiatives to support businesses amidst COVID-19, contact Reliance Consulting today.