Today, THAI ACCOUNTANT got an interesting question regarding the tax incentives related to employee training expenses.

Our Thailand-based company provides training courses to companies’ employees. We
heard from our clients that they can deduct 200% of the training cost when they
pay to us. How is it possible?

Answer:

Yes, your clients are able to deduct 200% of the training cost not as a discount
from their payment to your training course but they can use this as
expenditures for the purpose of computation and submission of their Corporate
Income Tax.

As imposed by Department of Skill Development, Ministry of Labour of Thailand, the
Skill Development Promotion Act B.E. 2545 has been issued to encourage enterprises to provide training, upgrading skills, knowledge and competencies for employees and for those who are not employees. And also encourage private sector to set
up and register with the DSD its own training centers for workplace learning
and training. The incentives have been provided to enterprises by deducting the
cost of training 200% from the annual tax payment. The compulsory measure has
been applied for the establishments with at least 100 employees which have to
provide training for the employees at the rate of 50% of the total number of
employees, if not the employer have to pay contribution to the Skill
Development Fund approximately 480 Baht per head per year for the number of untrained employees. Furthermore, the establishments gain other benefit under this Act such as exemption tax of the training machines, bringing experts or trainers to train their workers, free of charge of water and electric fees.

But before your clients can use this training cost as their expenditures, you must
check with the Labor Ministry if your training courses have to be approved by
them. You can contact them for details on how you can register your courses
with them.

After your courses have been approved by the Labor Ministry, your clients can use 200%
of the amount they pay for training in those courses. 100% of the expense is
normal deduction from your income and the other 100% will be deducted from the
net profit before tax. They will have to fill out the form prescribed by the
Revenue Department, which is the form to keep track of the expenses of sending
employees for training for each accounting period, and they should keep it for
future checking by the tax authorities.

For more expert advice on accounting and tax, please feel free to contact MSNA,
Thailand Accountant.