BANGKOK — Thai Cabinet approves tax measures to attract skilled workers in 15 target industries to Thailand by lowering income tax to 17 percent and allowing employers to deduct 1.5 times wages for five years
On July, 30, 2024, the Cabinet approved a draft ministerial regulation to revise tax measures aimed at promoting sustainable investment in Thailand. This tax measure is designed to support high-potential Thai individuals working abroad and in 15 target industries, encouraging them to return to work in Thailand. Both the employees and employers will receive tax benefits.
The 15 target industries are:
1. Automotive
2. Electronics
3. High-quality tourism
4. Agriculture, food, and biotechnology
5. Transportation and logistics
6. Automation and robotics
7. Aviation, aerospace, and space
8. Biofuels and biochemical
9. Petrochemical and chemical products
10. Digital
11. Medical
12. Defense
13. Circular economy support
14. International business centers
15. Other industries requiring specific expertise, such as technology research and financial consulting
Paophum Rojanasakul, deputy finance minister, said the government is prioritizing the recruitment of skilled workers for the country, whether they are students working abroad or workers currently abroad. These people are talented but are currently contributing to foreign economies. Their return would contribute to the development of the Thai economy and target industries and generate tax revenue that Thailand has not received so far.
In order to create incentives to work, the personal income tax for qualified employees with a withholding tax rate of more than 17 percent is reduced to 17 percent of taxable income. This applies to income from employment with companies or legal partnerships in the target sectors from the date the law comes into force until December 31, 2029.
For corporate income tax purposes, employers — companies or legal partnerships in the target sectors — can deduct 1.5 times the wage costs for qualified employees from the date the law comes into force until December 31, 2029.
Qualifications:
- Thai nationality with at least a Bachelor’s degree, worked abroad for at least two years.
- Must return to Thailand from the effective date of the Act until December 31, 2025.
- Must be an employee under an employment contract with a company or legal partnership in the targeted industries and earn taxable income under Section 40(1) of the Revenue Code.
- Must not have worked in Thailand in the tax year in which the tax reduction is first claimed and must not have resided in Thailand for at least two years prior to that tax year or, if they have resided there, must have resided there for a total of less than 180 days in that tax year.
- Must have stayed in Thailand for a total of at least 180 days, except in the first and last tax year of claiming the benefits, where a stay of less than 180 days is permitted.
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