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LTF/RMF

Under Notification of Director-General on income tax Nos. 257, 258 and 259 issued on 2 July 2015, there were changes in assessable income in relation to Long Term Equity Funds (LTF) and Retirement Mutual Funds (RMF) which are summarized as follows.

Income tax exemption for the purchase of LTF

Previously

  1. The purchase of investment units in an LTF does not exceed 15% of assessable incomes received in such tax year, provided only for the portion not exceeding 500,000 Baht.
  2. The exemption of income tax for the assessable income paid to purchase investment units in an LTF shall be exempt for the portion that is not more than 15% of the assessable income; provided that such amount shall not exceed 500,000 Baht for that tax year.

Currently

  1. The purchase of investment units in an LTF does not exceed 15% of assessable taxable incomes received in such tax year provided only for the portion not exceeding 500,000 Baht.
  2. The exemption of income tax for the assessable income paid to purchase investment units in an LTF shall be exempt for the portion that is not more than 15% of the assessable taxable income, provided that such amount shall not exceed 500,000 Baht for that tax year.

Income tax exemption for redemption of RMF

Previously

  1. The purchase of investment units in an RMF shall be not less than 3% of assessable income received each year or not less than 5,000 Baht per year.
  2. The exemption of income tax for remuneration or any benefit received from the redemption of RMF shall be exempt for remuneration for the portion that is not more than 15% of assessable income, provided that the amount shall not exceed 500,000 Baht for each tax year.

Currently

  1. The purchase of investment units in an RMF shall be not less than 3% of assessable taxable income received each year or not less than 5,000 Baht per year.
  2. The exemption of income tax for remuneration or any benefit received from the redemption of RMF shall be exempt for remuneration for the portion that is not more than 15% of assessable taxable income, provided that the amount shall not exceed 500,000 Baht for each tax year.

Income tax exemption for purchase of RMF

Previously

  1. The purchase of investment units in an RMF shall be not less than 3% of assessable income received each year or not less than 5,000 Baht per year.
  2. The exemption of income tax for the assessable income paid to purchase investment units in an RMF shall be exempt for the portion that is not more than 15% of the assessable income, provided that such amount shall not exceed 500,000 Baht for that tax year.

Currently

  1. The purchase of investment units in an RMF shall be not less than 3% of assessable taxable income received each year or not less than 5,000 Baht per year.
  2. The exemption of income tax for the assessable income paid to purchase investment units in an RMF shall be exempt for the portion that is not more than 15% of the assessable taxable income, provided that such amount shall not exceed 500,000 Baht for that tax year.

These Notifications shall be effective from 1 January 2015 onwards.

Examples of assessable incomes which are no longer an income base for the purchase of LTF/RMF under the new DGN include:

  1. Severance pay in the portion of compensation not exceeding remuneration or salary for the last 300 days of employment, and not exceeding 300,000 Baht
  2. Dividends received from a company receiving investment privileges (BOI company)
  3. Exempt income of 190,000 Baht for elderly people over the age of 65 years and the disabled
  4. Redemption of investment units held over 5 years which is income tax exempt

In conclusion, non-taxable incomes are not a tax base for purchase of LTF/RMF or redemption of RMF.