Sumet Mingmolmolmitr (Senior Partner)
Companies in Thailand are encouraged to support their employees in pursuing higher education or other training programmes. Such initiatives not only enhance employees’ skills but also strengthen the company’s long-term growth and profitability.
To promote this, the Revenue Department issued Order No. 122/2545, Re: Exemption of Income Tax Calculated from the Net Profit of Companies or Registered Partnerships Operating Businesses as Educational Institutions and Training Centres for Enhancing Employees’ Skills, and from Expenses on Education Purposes Made by Companies or Registered Partnerships dated 27 December 2002.
Deductible Expenses
Under this order, companies may fully deduct expenses incurred in supporting employees who:
- pursue further studies or training at public institutions or centres domestically or internationally;
- pursue further studies or training at private institutions or centres domestically or internationally; or
- participate in in-house-training sessions organised by the company itself or by an external service provider.
These expenses are not considered prohibited under Section 65 Ter (13) of the Thai Revenue Code. To qualify for the deduction, however, the company must be able to demonstrate that the expenses were incurred for the company’s benefit, and the supported employees are required to return to work for the company.
Additional Tax Incentive
In addition, companies that provides financial support for employees to study or train at:
- Government-established institutions or training centres, or
- Institutions announced by the Ministry of Finance in the Royal Gazette,
are also eligible to fully claim a tax exemption on its income equal to the amount paid for the employees’ education or training. This incentive is granted under the Royal Decree issued pursuant to the Revenue Code Governing the Exemption from Revenue Taxes (No. 437) dated 15 October 2005.
These provisions highlight the Thai government’s commitment to encouraging workforce development while offering companies meaningful tax relief. To further navigate the rules and maximize available benefits, companies are encouraged to consult with a qualified tax counsel.