Life Insurance / Ltf Rtf Tax Free Or Tax Deferral?

[MattFS218]

The Thai Personal Income Tax code specifies that 15% of salary up to 500k/baht/year can be deducted from personal income tax. I am wondering if this results in Tax Free Savings, or if it is merely of means of tax deferral. Deferral being once you take the money out of the Life Insurance/ LTF/RTF must it be declared and made apart of the persons Personal income tax?

[samran]

tax free if held over 5 callendar years.

ie. put your money in 31 december 2010, then withdraw 1 Jan 2014, the monies you put in an whatever growth are all tax free.

[KamnanT]

tax free if held over 5 callendar years.

ie. put your money in 31 december 2010, then withdraw 1 Jan 2014, the monies you put in an whatever growth are all tax free.

That applies to an LTF (long term fund). An RMF is personal retirement savings account (similar to a US IRA, Canadian RRSP, stc. style account) and in most instances cannot be accessed tax free until you have contributed a minimum of 5,000 baht per year for at least 5 calendar years and have reached age 55.

The premium on a term or whole life insurance policy from a registered Thai insurer is a deductible expense up to a maximum of 100,000 baht per year. In mid-October, the Thai Cabinet endorsed a Ministerial Regulation that would allow a further deduction of up to 200,000 baht or 15% of assessable income (whichever is less) for "pension insurance" premiums. To qualify as "pension insurance", a policy must meet the following minimum criteria:

1. The period insured must be at least ten years, counting from the date on which the insurance policy become effective until the date on which the last pension payment is made.
2. No benefit payment is payable during the insured period, before the insured person age 55, except in the event of the death of the insured person.
3. No lump sum benefits payment upon the completion of insurance premium payment schedule.
4. The pension benefit payout must be on an installment basis, e.g. annually, monthly, etc.
5. The pension benefit payout is made after the insured person reaches the age of 55 until at least the age of 85.

The maximum total deduction permitted for RMF contributions, company provident fund contributions, civil service pension fund contributions and pension insurance premiums is 500,000 baht per year.

[aurelius]

i.e. max 500,000 for LTF and an additional 500,000 as KanmanT describes for RMF etc above. And a deduction for home loan interest paid up to 50,000bt too (mainly applies to Thais who can borrow).

[KamnanT]

i.e. max 500,000 for LTF and an additional 500,000 as KanmanT describes for RMF etc above. And a deduction for home loan interest paid up to 50,000bt too (mainly applies to Thais who can borrow).

Small correction: maximum mortgage interest deduction is 100,000 baht per year (must be a mortgage from Thai or foreign bank branch in Thailand - interest on offshore mortgages is not deductible).

[MattFS218]

thanks for the additional clarification. Any recommendations on which LTF company to use? Krung Sri has some specials going on now...as do most other LTF companies (since it's the end of the year)