Tax Deducatbles

[Kananga]

I wonder if anyone can help me here,

I understand that I can offset long term funds and retirement mutual funds against my income tax contributions to a maximum of 180,000 baht a year. Is there any requirements to the type of funds that need to be set up (Thai banks etc) or can you declare any offshore fund you are already investing in?

Thanks

[aurelius]

Thai Long Term Equity funds and / or Retirement Mutual Funds only. These are distributed by most local and their asset management company partners.

The max amount for each fund is 500,000Bt or 15% of income whichever is the lower. The Retirement Fund eligibility is considered net of any provident fund contributions. i.e. if you were entitled to a tax deductible of 300,000 Bt, but also had provident fund contributions of 70,000, then the total amount the total amount remaining eligible for retirement mutual fund deduction would be 230,000. RMF requires annual contribution until age 55 and a minimum of 5 years.

LTF must be held for 5 years, but the year in which the fund is held is counted as a full year (even if not a full year) and the year in which the fund is redeemed is considered a full year (even if not). Therefore technically you could buy the fund on the second last day of the year and redeem in 3 years and 2+ days later of the first business day of the new year. No requirements for LTF regarding provident funds.

If you break the conditions of the investments then there are penalties such as paying capital gains tax and refunding the amount of the tax benefit that you already claimed (may be others - check the fine print).

[Kananga]

Thanks, that is great info. How are these Thai funds performing on average?

[aurelius]

check mornginstar ratings..

http://tools.morningstarthailand.com/th/fundquickrank/default.aspx?Site=th&LanguageId=en-TH

select LTF from the AIMC category drop down box, also several RMF categories available

[Kananga]

Thanks so much, you have been really helpful.

[ShopBoy]

Sorry if it's a stupid question.

How do i buy these funds ?

[CWMcMurray]

Go to your local Bank branch.... I bought Bangkok Bank LTF earlier this year it was pretty simple.

Go in with Passport and Work Permit and fill out the paperwork and turn over the funds... they will then issue you with what looks like a Bank book with number of shares inside.

They can only issue book on Mon-Fri, but if you (like me) work during the week and do not have time to go to the bank, you can go during the weekend. They will allow you to fill out all of the paperwork and turn over the funds and they will issue the book on Mon. You can then go back the following Sat to pick up the account book.

[SolarOhm]

Thanks so much, you have been really helpful.

You are far better negotiating with your Employer so that you contribute 500,000 to your Provident Fund and the Employer contributes 15% of your wage to it tax exempt. That will at least double the amount you have invested and also the amount of tax you will save. Consequently there will be a massive increase in your final investment capital built up under the tax shelter - when you withdraw after 5 years or at retirement. (the longer the better)

[Kananga]

Thanks so much, you have been really helpful.

You are far better negotiating with your Employer so that you contribute 500,000 to your Provident Fund and the Employer contributes 15% of your wage to it tax exempt. That will at least double the amount you have invested and also the amount of tax you will save. Consequently there will be a massive increase in your final investment capital built up under the tax shelter - when you withdraw after 5 years or at retirement. (the longer the better)

Thanks, I am still waiting to hear back on the company policy on employer Provident fund contributions.

From what I understand there is a 30% tax rebate on the employer contribution as well so 1 million is paid into the fund every year, yet there is a 150,000 baht tax refund to both the employer and employee. Even if the employer doesnt pay the full amount I can ask them to and reimburse them 350,000 while taking the 500,000 contribution which effectively means I am paying 700,000 annually yet getting 1 million in return. I think...