The rundown on SME tax breaks
The cabinet has approved tax breaks to support small and medium-sized enterprises (SMEs) that use more computer programs in their management and accounting, allowing them to enjoy a two-fold corporate tax deduction on expenses. The tax measures will last until December 2019.
Below is a list of tax measures implemented over the past three years:
MARCH 21, 2017
“SME transformation” soft loan programme worth 15 billion baht was approved, aimed at enhancing and transforming Thai SMEs to expand abroad.
The soft-loan package was extended via the state-owned Small and Medium Enterprise Development Bank of Thailand, through which the government will help subsidise 2.25 billion baht in interest.
JAN 21, 2017
Some 30 billion baht worth of soft loans through the Government Savings Bank to SMEs was approved to help upgrade machinery and productivity. The programme runs until Oct 31, 2017.
AUG 9, 2016
Tax incentives for owner-operated SMEs that register as juristic persons and pay proper taxes were approved. The new tax perks include a corporate tax deduction of 60% of expenses from Jan 1, 2017; exemptions for corporate income tax and valued-added tax; a reduction of the specific business tax to 0.01% from 2%; and a reduction of property transfer fee for those who move their properties to new juristic persons to 0.01% from 2%. The incentives will be effective until Dec 31, 2017.
AUG 2, 2016
Tax incentives were approved for large companies that act as mentors to small firms and startups, allowing them to further benefit from a two-fold corporate tax deduction on expenses incurred while helping smaller companies for up to 10% of their profit.
However, large companies should not hold any shares in the small firms or have any power to control those small companies.
JULY 5, 2016
A 10-billion-baht credit guarantee scheme was approved for SME startups and innovative companies, offered by the state-owned Thai Credit Guarantee Corporation (TCG). Under the scheme, eligible SMEs cannot have assets exceeding 200 million baht, while the TCG will offer a credit guarantee of 1 million baht for startups and innovation projects run by individuals, and 5 million baht per borrower for startups and innovative companies.
The TCG is also be allowed to offer a credit guarantee of up to 20 million baht for innovative companies with new products or new technology.
DEC 22, 2015
The Finance Ministry approved the expansion of a 100-billion-baht soft loan scheme for SMEs by 50 billion baht. The initial 100 billion baht was already taken out, and the expansion was allotted to meet demand for the scheme.
SEPT 30, 2015
The Commerce Ministry approved a budget of 329 million baht between 2016 and 2018 to improve market access for SMEs, community businesses and farmers.
The projects include the development of 54 central markets nationwide, the development of markets for communities and farmers, and upgrading the ministry’s online market place, Thaitrade.com. The project aims to generate revenue of 18 billion baht for SMEs, community businesses and farmers in three years.
JUNE 16, 2015
The Finance Ministry earmarked 4.1 billion baht to subsidise surcharges and lending rates incurred from a credit guarantee scheme for SMEs. Of the total, 875 million baht will go to pay surcharges incurred from credit guarantees for the loans SMEs secured from commercial banks.
The remaining 3.26 billion baht will be allocated to subsidise the 3% lending rate of the loans SMEs secured from SME Bank and surcharges incurred from credit guarantees for loans SMEs secured from the state-owned Thai Credit Guarantee Corporation.
MARCH 17, 2015
Low-interest loans worth 15 billion baht for SMEs affected by liquidity problems were approved, along with credit guarantees for SME loans worth 50 billion baht via Thai Credit Guarantee Corporation.
DEC 16, 2014
A venture capital scheme worth 25 billion baht was approved to help develop and upgrade SMEs. The government would hold up to a 50% share in the venture capital, with the remaining stake for private companies to invest in other companies.