The Thai Revenue Department has recently changed the personal income tax rates for the tax years 2013 and 2014.

If you earned income and taxes were withheld using the progressive rate during the year 2013, when you file your personal income tax return of 2013 whose deadline is 31 March 2014, you will most likely get some tax refund due to the fact that your employer withheld the tax using the rates that were in effect last year.

Here are the new personal income tax rates:

If you need help to prepare and file your Thai personal income tax return, please contact MSNA. We have been providing foreigner income tax service for many years.

We would like to cut down the public holiday from 16 to 13 days per year. Do we have to send an official letter to the employees and submit this new company policy at the Labour Department?

Answer:

Yes, you can cut down your annual public holiday to 13 days which is the minimum number of traditional holiday in Thailand per Thai labour law.

You do not have to take it to the Labour Department. Just post it on the company’s bulletin board, if you have one. But if not, just make a letter to announce it and have everyone sign it under the sentence “I have read and understood the above.”

Need help on Thai labour law issues, contact MSNA for Thai accounting, tax and payroll services for further consultation.

According to Section 29 of Labour Protection Act B.E. 2541, an employer shall announce not less than thirteen traditional holidays per year in advance for employees, including National Labour Day as specified by the Minister.

The employer shall fix the traditional holidays according to the annual official holidays, religious or local traditional holidays.

If a traditional holiday falls on a weekly holiday of an employee, the employee shall take a day off to substitute for the traditional holiday on the following Working Day.

Whereas an employer does not provide a traditional holiday to an employee because the employee performs work of such description or nature as prescribed in the Ministerial Regulations, the Employer shall make an agreement with the employee to take another day off to substitute for the traditional holidays or the employer shall pay holidays pay to the employee.

Contact MSNA for your business needs. Our team of experts can provide professional advice on Thailand accounting, taxation and Thai labor law matters.

One of the grounds for termination of employment of an employee with cause under the Labour Protection Act is repeated violation of work regulations, rules or orders which are both lawful and equitable subsequent to a written warning for which a previous letter of warning has been issued for the particular act. The letter will be effective for a period of 1 year from the date on which the employee commits the violation, not from when the letter was written. However, in case of a serious violation, a written warning notice is not required.

Section 119 (4) of the Labour Protection Act B.E. 2541 (1998) discusses the dismissal for serious cause of an employee who has committed a repeat violation of an offence for which a written warning has already been given, but does not give guidance for the form requirements for the warning letter itself based on the following:

1. Prior to issuing the warning letter, the employer should first consider the work rules. If they contain a disciplinary procedure consisting of several stages which have to be followed step by step, the employer must follow each step.
2. The warning letter must contain:
   1. Date of issuance of the warning letter;
   2. Name and position of the employee;
   3. A description of the behavior of the employee that constitutes a violation of the work rules;
   4. A reference to the work rules which the employee has violated;
   5. A statement that of the employee commits the same violation of the work rules again, the employer will punish the employee pursuant to the procedure in the work rules.

Furthermore, the employer should ask the employee to sign the warning letter as an acknowledgment. The employer can read the letter to the employee and ask 2 witnesses to sign the letter to confirm it has been read and that the employee refuses to sign. A letter from the employee acknowledging violations does not constitute a warning letter.

If the employee is a member of an Employee Committee formed in accordance with the Labour Relations Act, the employer may not discipline the employee, including by issuing a warning letter, even where there has been a determination of guilt. The employer must submit a petition to the Labour Court seeking an order approving the discipline of the employee. If approved, the employer may then proceed as described above.

In the event that the employer relocates its place of business in a way that essentially affects the normal living of an employee, the employer must notify the employee of the relocation at least 30 days in advance or pay an amount in lieu of the advance warning of 30 days’ wages. If the employee refuses to move and work in the new location, the employee has the right to terminate the employment contract within 30 days as from the date of being informed by the employer or the date of relocation, as the case may be. In this regard, the employee is entitled to receive a special severance pay at the rate of not less than the rate of severance pay.

In the event the employer terminates an employment as a consequence of streamlining the work units, production process and distribution service, due to an introduction or change of machinery or technology that reduces the required number of employees, the employer must notify the Labor Inspector and the employee concerned at least 60 days in advance of the date of termination or pay an amount in lieu of an advance notice, that is equal to 60 days’ wages to the employee. Moreover, the terminated employee will be entitled to the prescribed severance pay. In addition to that, if the terminated employee has worked consecutively for more than 6 years, the employee would be entitled to an additional special severance pay at the rate of not less than 15 days’ wages for each full year of service, calculated from the start of year seven onwards. However, the total amount of this additional special severance pay is limited to the equivalent of 360 days’ wages.

If you want to ask us questions on Thailand labor law, please visit www.msna.biz for more information.

Today, we got an inquiry from one of the avid readers of our articles.

Question:

Hi, I’m an Asian and one of the foreigners working in Thailand. I have a valid non-B visa and Thai work permit with my employer company which submits my monthly tax and social security contribution to Thai authorities. My question is about my Personal Income Tax particularly the certain types of allowances that I can use as exemption to compute my taxes. Although I am still single at the moment, I have my aging parents back home whom I support financially every month. Can I use parents allowance for the computation of my Personal Income Tax?

Answer:

First of all, thank you for your inquiry. To answer your question, parents allowance is one of the types of allowances that are allowed for the calculation of Personal Income Tax. However, it only applies to Thai citizens. Unless your parents have obtained Thai national ID card and become Thai citizens, you cannot use parents allowance as exemption for your Personal Income Tax. Thus, if you got married and have children, you can use spouse allowance and child allowance regardless of their nationality and whether they stay with you in Thailand or in another country.

Know more about types of exemptions that are allowed for the calculation of Personal Income Tax. Contact MSNA for the computation, preparation and submission of your Personal Income Tax Returns in Thailand.

The Thai government has urged the public and private sectors to adjust themselves and seek new opportunities brought by the upcoming ASEAN integration. ASEAN Community, which will take effect in 2015, is expected to bring challenges and greater opportunities as well. If all sectors of society are well-prepared for changes, they will benefit from new opportunities.

The government had announced the ASEAN issue in its policy so that both public and private sectors would be able to prepare themselves. At the same time, they should work together in setting long-term goals to achieve when the ASEAN Community is in place.

In preparation for the ASEAN Community, the government has also worked out four major strategies as follows:-

(1) In the first strategy, the government will focus on enhancing Thailand’s competitiveness and developing it into a higher-income nation. In this regard, land zoning will be introduced to reduce production costs in agricultural production. The government will invest in transport infrastructure and develop further small and medium-sized enterprises and the “One Tambon, One Product” program.

(2) The second strategy aims to promote social equality by developing the quality of Thai people, reducing disparities between low-income and high-income earners in the country, providing greater opportunities for the people, and introducing education reform.

(3) The third strategy emphasizes “green growth” by promoting a way of life that is environmentally friendly, such as the use of solar energy and the reduction of green-house effects.

(4) In the fourth strategy, the government will create a balance in national development and improve public sector management to order to enhance the efficiency of national administration. For the private sector, the government will seek business partnerships to create regional production networks, while upgrading the standards and quality of products in response to the demands of consumers in ASEAN and beyond.

The government also urged the members of the public to improve their language skills and prepare for the free flow of products, services and labor. The people must still preserve their culture within the diversity of ASEAN and that they should also learn new things and new alternatives brought about by ASEAN integration.

Implementation of these strategies and adjustment for new opportunities brought by AEC has yet to be announced. Contact MSNA for company registration, work permit & visa, Thai labor law and further information about doing business in Thailand.

In the event that an insured person became unemployed, he/she will be entitled to the unemployment benefits under the following circumstances:

– For unemployment resulted from termination of employment or laid-off, the insured person will receive 50% of wages for not more than 180 days within 1 year calculated on the basis of maximum contributions of Baht 15,000.

– For unemployment resulted from voluntary resignation, the insured person will receive 30% of wages up to 90 days within 1 year calculated on the basis of maximum amount of contributions but not more than Baht 15,000. If in the duration of 1 year there was more than 1 application for the unemployment benefits, the counting of the unemployment benefit receiving period in total shall not exceed 180 days; hence, the compensation benefit for loss of income shall be paid on monthly installment basis by crediting to the Bank Account as notified by the Insured.

Know more about Thailand Social Security and its benefits. Contact MSNA for consultation and for submission of your social security fund contribution.

In Thailand, an employee is expected to follow the Employer’s disciplinary measures as follows:

1. He or she must comply with the work rules.
2. He or she must comply and follow a lawful order of a superior.
3. He or she must perform work on the time assigned and make the working time in record.
4. He or she must perform duties with integrity and must not persecute or intend to cause any damage to an employer or other employees.
5. He or she must perform work actively with utmost effort.
6. He or she must follow a regulation on occupational safety.
7. As necessary or as suitable to his/her duty, he or she must maintain machines, tools and equipment to be in a good condition and well keeping.
8. Employees must carefully carry out surveillance and prevention against the potential loss or damage made by a person or other ominous incidents to property in working place or factory compound with full of ability.
9. Employees must keep a workplace or factory compounds clean and clear.
10. He or she must not make a brawl with or an assault against any person in a workplace or factory compounds.
11. He or she must not take illegal drugs, a lethal weapon or an explosive substance into a workplace or factory compound.

In the event of an employee acts against these disciplinary measures, he or she will be warned in oral, warned in writing, suspended or dismissed according to the level of his/her offence. Whereas, an employee allegedly violate the disciplinary measures, the employer may issue a written order of the suspension stating the offence committed and the period of suspension of not exceeding 7 days and notify the employee prior to the suspension.

During the suspension, the employer must pay the employee of not less than 50% of the wages of a working day prior to his/her suspension. Upon the completion of the investigation, if it appears that the employee is not guilty, the employer must pay wages to the employee equivalent to the wages of a working day from the date of suspension. The payment must be included as part of the employee’s wages, plus interest at a rate of 15% per annum.

Know more about your duties as an employer in Thailand. Contact MSNA for Thai Labor Law consultation and related services.

The Thai Revenue Department has recently enhanced tax benefits for taxpayers who contribute to provident funds.

Previously, the employees’ income or benefits received upon the termination of their employment due to death, disability, or retirement was tax exempted. The new tax benefit eliminates the retirement requirement whereas if an employment is terminated before an employee turns 55 years old, his/her income or benefits received upon such termination is still exempted on the conditions that such income or benefits remain in the fund until the death or disability of the employee or the employee reaches 55 years of age.

The implementation of tax benefit aims to encourage long-term savings for the provident fund members. When the members have retired or left their job according to the law, any payment or benefits received upon such retirement or employment termination is tax exempted. This will improve the quality of life and promote the equality between members of provident funds and the government pension funds.

Need help on Thai taxes? Contact English speaking accountants and tax experts of MSNA.

Part of Thailand social security benefits is that if an insured person has sustained injury or has been ill, he shall be entitled to be admitted for medical treatment at the hospital of his choice according to the Certified Entitlements Card or at an affiliated hospital without bearing any cost and shall be entitled to compensation benefit at half of the receiving wage according to the actual number of days of leave not exceeding 90 days or 180 days in a year for loss of income in the course of medical treatment at the recommendations of the attending physician.

In case of chronic sickness, the insured person shall be entitled to compensation for loss of income for not exceeding 365 days.

To receive medical treatment and compensation, the following requirements must be presented:

1. Certified Entitlement Card and Citizenship Identity Card or passport is required when applying for medical treatment from the hospital;
2. When applying for compensation payment to the loss of income, the insured person is required to present the Application for Compensation Benefit Form (Sor Por Sor. 2-01 Form); the medical certificate, a certificate from the employer and a copy of the bank account, particularly the copy of the first page on which the name of account and account number are shown (in the case of receiving compensation payment through the Bank).

Contact MSNA for your Thailand Social Security questions and payroll needs.