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Investment To Avoid Thai Income Tax


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In this thread, expatman says:

If you're working in Thailand the best way to save money is by contributing to a Retirement Mutual Fund (RMF) or Long-Term Equity Fund (LTF). Check out major bank websites. You can contribute up to 15% of your taxable income to RMF and up to 15% to LTF, making a total of 30%.

The main advantage is that anything you contribute is deductible from your taxable income.If you are making more that 1 million baht a year 30% of anything over that amount is what you pay in tax, so you get a big refund on your next income tax return - doubtful the stock market will go down by more than 30% over several years, so it's hard to lose.

For RMF you must contribute every year (minimum 5,000 Baht), and cannot withdraw money until you are 55. For LTF only initial contribution required, but must be held for 5 calendar years (even 1 day counts as a calendar year, so if you contibute in Dec 2010 you can withdraw in Jan 2015.For RMF and LTF capital gains are not taxable.

You can also purchase a savings account / life insurance plan, and up to 100,000 baht is deductible from taxable income. The return on these plans is not great - about the same as an ordinary Thai bank account - but again the main advantage is the tax savings.

I would like to start saving tax in this manner. Does anyone have any advice as to which bank is best and which savings schemes they have found to be good? I noticed someone recommending Thai Military Bank in this thread for a monthly savings scheme. Any other specific banks, schemes? I don't need a monthly plan, I have plenty of savings to invest right away and would prefer to work from a single bank. Thanks in advance for any help.

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I have invested with LT fund with Bangkok Bank and can't complain... the process to set it up was quick and easy and I have justr received the paperwork needed to submit with this years taxes for refund.

As far as returns go, I am happy... SET has been up and down over the year, but as of now, in addition to the 30% tax refund on the principole invested, I have also seen an increase in value of 7% on the mutal fund share prices.

I also like Bangkok bank, as the webiswte is in English and it is very easy to monitor update values online.

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