BDO Flash Alert: Personal Income Tax – Domestic Shopping of the year 2023 (“Shop Dee Mee Khuen”)

The government has approved a personal income tax deduction of up to THB 40,000 for certain purchases of goods and services from 1 January 2023 to 15 February 2023. The purchase must be supported by a proper tax invoice under the Value Added Tax (“VAT”) regulations, except if the vendor is a non-VAT registered business operator engaged in the business of selling books, electronic books (e-books), or One Tambon One Product Program (“OTOP”) products from shops registered with the Community Development Department.

The THB 40,000 tax deduction is divided into two (2) parts:

For the purchase of goods or services up to THB 30,000 (inclusive of VAT), the full form of tax invoice or receipt (whether in the form of a paper or e-Tax invoice, or e-Receipt) must be available.
For the purchase of goods or services up to THB 10,000 (inclusive of VAT), the transaction must be supported by an e-Tax invoice or e-Receipt only.

The tax deduction cannot be claimed if the purchase covers the following goods or services:

Alcohol, beer, and wine
Tobacco
Car, motorcycle, and boat
Newspaper and magazine (both paper and electronic)
Service fee for tour and hotel accommodation
Public utilities, electricity, telephone bill, internet bill
Service fees covering period beyond 15 February 2023
Non-life insurance premiums

BDO Insight:

This is the first year that the spending on fuel for cars and motorcycles is allowed as a tax deduction.
The name and tax ID number of the taxpayer indicated on the full form of a tax invoice or receipt must be accurate.
For the purchase of books, electronic books (e-books), or OTOP products from a non-VAT registered shop, the receipt must include the following information:

The name and surname of the taxpayer
The tax ID number of the vendor
The name or brand of the vendor
The serial number of the book and the relevant receipt
The issuance date of the receipt
The amount paid on the transaction
The type, name, amount, and price in case the price of the goods is THB 100 or more.

The e-Tax invoice or e-Receipt must be issued by shops duly approved by the Revenue Department (The list is available here).
The THB 40,000 spending is an allowable tax deduction, not a tax refund. Please see the effective tax benefit rates below:

Accordingly, if you have a net income of THB 600,000, your top rate is 15%. For a domestic spending of THB 40,000, the effective tax rate benefit is THB 6,000.

Issuances related to the tax deduction:

Director General Notification No. 431 issued under the Revenue Department of Thailand
Ministerial Regulations No. 386 (year 2022) issued under the Revenue Code on tax exemption.