I'm looking to advise a friend so that their overall monthly tax bill goes down, by including some allowances. I know that it is legal, and is done by many companies, but that's all I know!

Is there a financial limit to how much each allowance can be and are only certain kinds of allowances allowed by the tax office? I was thinking of allowance categories like travel, housing, medical insurance etc, as these are ones I have had personal experience of receiving on past payslips over the years here in Thailand from various companies.

Are there any armchair accountants reading this who can advise?

Cheers!

(Mods - I posted this in the Teaching forum as my mate is a teacher. But thinking about it I guess more accountants might be reading it here - apols if I've done wrong.)

I don't there is any max for Charity, but I was told by my university instructor (also works pretty high up in the tax department here in Thailand) that if you claim 10,000 thb or more per year it will raise red flags and you should make sure you have the receipts to back it up.

Under 10,000 thb there should not be any issues.

10,000 baht per year i don't think so. i think you would be looking at 10,000 baht a month!! As for receipts, they are easily obtained. I used to break my salary down from 35,000 to 19,958 baht a month which left me paying 417.50 baht a month in tax.

Send me a PM if you want a full break down.

I don't there is any max for Charity, but I was told by my university instructor (also works pretty high up in the tax department here in Thailand) that if you claim 10,000 thb or more per year it will raise red flags and you should make sure you have the receipts to back it up.

Under 10,000 thb there should not be any issues.

What that school teacher probably tried to explain was that one can deduct up to 10 k a year for charity without proper receipts. Charity above that amount can also be deducted, provided one can produce proper receipts.

I could be wrong, but I belive that any allowance that is not receipted is considered income and subject to tax. I know that I my housing allowance is included in the Thai income I pay tax on. I also know that our Thai employees that choose a mileage rate for travel instead of receipting actual expenses, also have to have the amount included as income.

TH

It used to be the case that you could donate up to 2% of your income in chartiable donations. That could have changed.

As to minimising your tax, it depends on how long you wish to remain in Thailand. Probably the best tax write-down is an investment in a LTF - but that's a 5 tax year (4 calendar year) investment.

http://www.rd.go.th/publish/6045.0.html

Straight form the tax department

Apart from the regular deductions for parents and children, you can deduct for life insurance, provident funds, long term equity funds, and charity.

The first three you are allowed to deduct up to 15 % of your salary, but needs to be proven by invoices.

The charity only allows 15 % of what is left of your salary AFTER deducting all allowances and deductions! I guess only for the charity donations you'd be able to get invoices without actually contributing...