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Fixed Asset Investment in Thailand

09 August 2016

To stimulate the economy, the |government is continually looking for ways to promote more fixed asset investment in Thailand.

Recently, a Royal Decree (No 604) was issued to provide tax incentives to companies planning to expand or make major investments in assets. This Royal Decree will allow companies an additional depreciation deduction for assets acquired between November 3, 2015, and December 31, 2016.

The additional deduction will not simply take the form of a double deduction of the normal depreciation. For instance, to use a simple example, on December 1, 2015, a company purchased a table for Bt1,000, which will be depreciated over a period of five years in both its accounts and tax returns. This means that in its books for the year ended December 31, 2015, the company will only record the related depreciation of Bt16.99 (1,000 times 20 per cent times 31/365).

However, with this special tax incentive, the company will be able to take a tax benefit of the additional deduction equal to the investment amount divided evenly over the useful life of each class of assets as prescribed in the regulations, which in this case is five years, so will be Bt200 (1,000 times 20 per cent). The asset must be included in the company’s fixed asset register.