The cabinet has approved an extension of the reduced e-withholding tax rate through 2027, which is expected to enhance business liquidity by roughly 27 billion baht.
Speaking after Tuesday's cabinet meeting, Finance Minister Ekniti Nitithanprapas said the cabinet approved the extension of the reduced withholding tax rate until the end of 2027 from its original expiry date in 2025. The measure applies retroactively.
Under the extension, the withholding tax rate remains at 1%, reduced from the standard rates of 5%, 3% and 2%, for assessable income payments made electronically to both individuals and juristic persons.
Eligible payments include rent, commissions, copyright costs, service fees, contract work payments, and fees for independent professional services.
The measure is intended to enhance business liquidity and reduce administrative and documentation burdens.
The Revenue Department also expanded opportunities for private sector participation as electronic data service providers. There are 23 providers of e-tax invoice and e-receipt services, one e-filing service provider, and five e-stamp duty service providers.
These services help facilitate tax compliance, particularly for small enterprises that may face constraints in developing their own digital systems.
In addition, the cabinet approved the Finance Ministry's proposal to extend tax incentives supporting electronic tax systems from their original expiry date of Dec 31, 2025 to Dec 31, 2027. The objective is to support Thailand's digital transformation, reduce operating costs for businesses, and encourage the adoption of digital technologies for more efficient tax administration.
Under the measure, companies and registered partnerships investing in or using e-tax invoices, e-receipts and e-withholding tax systems are eligible to claim a double tax deduction, equal to 200% of actual expenses incurred. Eligible expenditures include investments in software systems, computer equipment, electronic data storage systems, and fees paid to electronic tax service providers.
The measure also introduces a new tax incentive for information system assessment expenses incurred by service providers and paid to the Electronic Transactions Development Agency, expected to enhance the security standards and reliability of government digital systems.
The Revenue Department estimates the measure will reduce corporate income tax revenue by 66 million baht over two years.
