New personal income tax exemption on severance pay

At a glance

• A Ministerial Regulation issued under the Revenue Code of Thailand regarding revenue tax exemption and dated 10 July 2024, was published in the Royal Gazette on 17 July 2024 (Ministerial Regulation).   
• Under the Ministerial Regulation, the amount of the personal income tax exemption on statutory severance pay for a terminated employee is increased to an amount not exceeding the lower of the employee's wages for the last 400 days or THB600,000.
• This new exemption under the Ministerial Regulation does not apply to a severance payment made to an employee on retirement or on completion of a fixed-term employment contract. 
• The exemption applies to assessable income received from 1 January 2023.
• The new exemption is higher than the previous tax exemption which applied to an amount equal to the lower of the employee's wages for the last 300 days or THB300,000.