Consumers flocked to malls on Saturday to take advantage of the tax break officially announced on Friday to spur domestic consumption in the last seven days of this year.
The crowds heading out for spending sprees caused traffic jams in areas around several malls in Bangkok.
The "Shopping for the Nation" campaign allows taxpayers to deduct up to 15,000 baht spent on certain goods and services (see chart below) between Dec 25 and 31 from their taxable personal incomes.
However, purchases must be made from a business registered in the VAT system in order for customers to be eligible for the windfall.
As well, VAT-exempted goods such as pork, chicken or gift vouchers are not eligible.
As well, the goods and services must be bought or delivered during the seven days. Coupons or vouchers bought earlier but used during the period are therefore not eligible.
Customers will have to ask for official receipts which show their names and addresses to be filed when they file their tax returns next year. The receipts can be combined up to the 15,000-baht limit and the amount can be deducted from personal taxable income.
Based on the criteria, shoppers would enjoy tax savings in a range between 750 and 5,250 baht depending on their personal income tax rates (see chart).
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Eligibility of some goods and services for special tax deduction |
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Eligibility |
Rationale |
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Utility bills (water, electricity, phone) |
No |
Payments are for services of previous month |
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Breast implants, cosmetic surgery |
Only at VAT-registered facilities, not hospitals |
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Medical bills |
No |
VAT exempted |
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Bullion |
No |
VAT exempted |
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Pork, chicken, fish |
No |
VAT exempted |
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Books, textbooks, magazines |
No |
VAT exempted |
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Duty-free products |
No |
VAT exempted |
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Meals, drinks at restaurants |
Only for VAT-registered restaurants, excluding liquor, beer, wine |
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Gold ornaments |
Only for craftsmanship fees |
VAT charged only for craftsmanship fees |
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Life, auto insurance |
No |
Coverage is beyond Dec 25-31 |
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Automotive repairs |
Only if orders are placed Dec 25-31 and jobs completed by Dec 31 |
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Automotive parts |
Yes |
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Service coupons or cards |
Only if they are used Dec 25-31 |
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Gift vouchers |
No |
VAT exempted |
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Overseas tour packages |
No |
Measure promotes domestic consumption |
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Domestic tour packages |
Only if they are bought and used Dec 25-31 |
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Massage, spa |
Only for VAT-registered facilities |
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Tax returns under programme |
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Net personal income (baht) |
Personal income tax rate |
Maximum tax return (baht) |
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1-150,000 |
Exempted |
- |
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150,001-300,000 |
5% |
750 |
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300,001-500,000 |
10% |
1,500 |
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500,001-750,000 |
15% |
2,250 |
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750,001-1 million |
20% |
3,000 |
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1,000,001-2 million |
25% |
3,750 |
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2,000,001-4 million |
30% |
4,500 |
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4,000,001 or more |
35% |
5,250 |