2021 Options for Minimizing Personal Tax and Maximizing Your Savings Plan

Super Saving Fund (SSF)

Contribute up to max. 30% of taxable income (capped at THB 200,000). When combined with contributions to “Other Programs” (listed below), total contributions may not exceed THB 500,000 in aggregate:

• “Other Programs” include: Retirement Mutual Fund (RMF), Provident Fund, Government Pension Funds, Private Teacher Aid Fund contributions, National Saving Fund and Retirement Insurance.
• Applicability: 5 years (2020-2024).
• Above contributions are tax-deductible for Personal Income Tax (PIT) computation purposes.

Conditions:

1. SSF allows you to invest in a range Government approved investment funds.
2. Taxpayers must maintain their investment units for at least ten (10) years from the purchase date.
3. There is no minimum allowable amount for buying investment units (continuous investment is not required).
4. Revenues from the sales of SSF investment are tax exempt if all conditions of the SSF program are met.

Retirement Mutual Fund (RMF)

Contribute up to max. 30% of taxable income (capped at THB 500,000). When combined with contributions to “Other Programs” (listed below), total contributions may not exceed THB 500,000 in aggregate:

• “Other Programs” include: Super Saving Fund (SSF), Provident Fund, Government Pension Funds, Private Teacher Aid Fund contributions, National Saving Fund and Retirement Insurance.
• Applicability : 2008 onwards.
• Above contributions are tax-deductible for Personal Income Tax (PIT) computation purposes.

Conditions, per Notification of the Director-General of the Revenue Department on Income Tax (No.171):

1. RMF Investment units can be redeemed after 5 years, if they have been held continuously, and the holder is at least 55 years old.
2. Investors are required to continuously invest in RMF, at least once a year, and may not pause for more than one consecutive year.
3. There is no fixed minimum allowable amount for buying RMF investment units.
4. RMF “certificate of purchase” is required to support documentation for annual PIT return submission.

Life Insurance

Separate from RMF and SSF, annual contribution can be up to THB 100,000 in combination with Health Insurance

• Above contributions are tax-deductible for Personal Income Tax (PIT) computation purposes.

Conditions:

1. The insurance policy is issued by an insurer (e.g., banks / insurance companies) who operates within the licensed insurance business in Thailand.
2. The duration of the insurance policy must be at least 10 years.
3. If the Life Insurance provides cash returns or payouts, the amount received may not exceed 20% of the annual Life Insurance premiums or accumulated Life Insurance premiums.
4. Health Insurance premiums are eligible for PIT deductions of up to THB 25,000 and when combined with Life Insurance premiums cannot total more than THB 100,000.
5. If the coverage of your insurance policy includes coverage in addition to Life Insurance, amounts paid for any such additional coverage do not qualify as part of your Life Insurance contribution.

Health Insurance

Separate from RMF and SSF, annual Health Insurance contribution can be up to THB 25,000.  Increased from THB 15,000 to THB 25,000 on 17th June 2020 per Ministerial Regulation No. 365.

• Above contribution is tax-deductible for Personal Income Tax (PIT) computation purposes.

Conditions:

1. The insurance policy is issued by an insurer (e.g., banks / insurance companies) who operates within the licensed insurance business in Thailand.
2. Health Insurance premiums are eligible for PIT deductions of up to THB 25,000 and when combined with Life Insurance premiums cannot total more than THB 100,000.

Case Study 1: Indicative Tax Savings, for different salary ranges

Case Study 2: Indicative Contributions, for different age groups

Assumption

Person A’s details:

• 35 year-old, Single status
• Planning to retire at 55 years old
• Earns income from fixed salary
• Employer gives Provident Fund up to 5%
• Invests in SSF, RMF, and Provident Fund contributions up to maximum allowance of Baht 500,000.

Person B’s details:

• 50 year-old, Single status
• Planning to retire on 55 years old
• Earns income from fixed salary
• Employer gives Provident Fund up to 5%
• Invests in RMF, SSF, and Provident Fund contributions up to maximum allowance of Baht 500,000.