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Cabinet allows tax break on software-related expenses

Cabinet allows tax break on software-related expenses

BANGKOK: The Cabinet has approved a measure to allow small- and-medium-sized enterprises (SMEs) to use their software or computer program-related expenses as a deductible against corporate income tax due, at the rate of two times the expense in some cases.

COVID-19Coronaviruseconomics
By National News Bureau of Thailand

Sunday 16 May 2021, 10:00AM


In addition to the computing tax break, Labour Minister Suchart Chomklin has confirmed that employees of event organisation businesses, forced to suspend their operations because of the COVID-19 crisis, are allowed to claim compensation from the Social Security Fund. Photo: NNT

In addition to the computing tax break, Labour Minister Suchart Chomklin has confirmed that employees of event organisation businesses, forced to suspend their operations because of the COVID-19 crisis, are allowed to claim compensation from the Social Security Fund. Photo: NNT

Revenue Department Director-General Dr Ekniti Nitithanprapas said the approval is aimed at encouraging SMEs to deploy digital technology to upgrade their operations, reports state news agency NNT.

This new tax measure will be applied to SME accounting periods for 2021 and 2022, the report added.

The three eligible expenses include the purchase of software or computer programs from software firms, payment for the hiring of developers to create software or fees paid to software service providers. All these software firms, developers or software service providers must be registered with the Digital Economy Promotion Agency (DEPA).

The new tax measure means that, besides depreciation, SMEs can also use the cost of a new computer for a tax deduction, not exceeding B100,000. When hiring software developers or using software services, SMEs can book the tax deduction at the rate of two times the cost, not exceeding B100,000.

Phuket Property

The tax break follows the Labour Ministry confirming that the law does allow employees of event organisation businesses, forced to suspend their operations because of the COVID-19 crisis, to claim compensation from the Social Security Fund (SSF), noted NNT in a separate report.

Labour Minister Suchart Chomklin said operators of such firms are desperate, as conferences and functions have been cancelled and the firms’ activities have ground to a halt, due to bans on large gatherings, and they can no longer shoulder the expenses.

He explained that the prime minister earlier ordered the Social Security Office to review the law and find out if these employees qualify for compensatory assistance. Now, the Labor Ministry can confirm that employees of event organizers are eligible for compensation from the fund.

Last week, the Event Management Association urged relevant agencies to implement measures, including the government’s 50% co-payment subsidy, for the monthly salaries of their employees for the next 4-6 months, or until their businesses return to normal, and for the deferment of social security contributions from employers and workers for six months.

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