The Cabinet has approved a measure to allow small-and-medium-sized enterprises (SMEs) to use their software or computer program-related expenses as a deductible against corporate income tax due, at the rate of two times the expense in some cases.
Revenue Department Director-General Dr. Ekniti Nitithanprapas said the approval is aimed at encouraging SMEs to deploy digital technology to upgrade their operations. This new tax measure will be applied to SME accounting periods for 2021 and 2022.
The three eligible expenses include the purchase of software or computer programs from software firms, payment for the hiring of developers to create software or fees paid to software service providers. All these software firms, developers or software service providers must be registered with the Digital Economy Promotion Agency (DEPA).
The new tax measure means that, besides depreciation, SMEs can also use the cost of a new computer for a tax deduction, not exceeding 100,000 baht. When hiring software developers or using software services, SMEs can book the tax deduction at the rate of two times the cost, not exceeding 100,000 baht.