|
Posted Date: 2 February 2009
The Revenue Department has responded to an enquiry of the Association of Investment Management Companies (AIMC) about tax benefits for the retirees who maintain their investment in the provident funds after retirement that they could still enjoy tax exemption on the part earlier entitled to be tax exempted.
Ms. Araya Thirakomen, Chairperson of Provident Fund Business Group of AIMC, stated that, due to the impacts of the global financial crisis on investments in Thai money and capital markets, with plunging yields from provident fund investments since last year up to date, the employee members due to retire during this period would inevitably suffer from loss of fund earnings. However, with the enforcement of the new Provident Fund Act, i.e. Provident Fund Act (No. 3) B.E. 2550 (2007), fund members whose employment comes to an end due to either change of job or retirement may maintain their accrued benefits for a period stated in the respective fund regulations. Maintaining such investment amount in the funds will thus be an employees choice to be taken amid the prevailing financial turbulence in order to relieve the impacts on the retirees. In the enquiry letter issued by AIMC, the Revenue Department has been asked whether the members who maintain their accrued benefits in the provident funds upon their retirement and draw out such benefits afterward would still be entitled to tax exemption in the same way as they should have been upon their retirement.
Ms. Araya further said that the Revenue Department had duly issued a reply letter to AIMC clarifying that the provident fund members may still be entitled to tax exemption in the same way as they would have been when leaving their job because of either their age being not lower than 55 years upon their completion or termination of the written employment contracts and their membership of the provident funds pursuant to the law on provident funds being at least five years, or their retirement from their job. This will exclude the portion of benefits arising during the investment maintaining after leaving job, which is not the portion earlier duly exempted from tax payment and must be included in the taxable income for tax calculation. The members who maintain their investments in the funds for a further period of time without having to hurriedly make withdrawal upon retirement will have an opportunity to wait for a better timing after the money and capital markets recover in order to receive better yields before they draw out their investments.
|
