Tax Benefit
LTF
RMF
Long Term Equity Fund: LTF
Long Term Equity Fund is a mutual fund that invests in stocks. The government is encouraged to set up fund in order to increase the proportion of long-term institutional investors to invest in stock market. Increasing in institutional investors will provide Thai capital market more stable. Individual who invest in LTF will receive tax privilege. LTF is suitable for investor who want to invest in long term but may not have the expertise to invest in stocks. However, the investors must understand and accept the investment risk and condition relating to the duration of investment that require holding period not less than 7 calendar years.
Investment policy of LTF
Investment policy of LTF has only policy that invest in common stock that listed in stock exchange market not less than 65 % of net asset value average in year. Each LTF can have different detail such as LTF that invest in SET 50 or stock in each industry group or suggested stock from asset management company.
Tax Privilege of LTF
We can use LTF for tax exemption at the maximum amount not more than 15 % of accessible income and not exceed 500,000 bath. If investor invest according to Revenue department condition, the capital gain from investment is exempted from personal tax income.
Example 1
Accessible Income
840,000 Baht
15 % of Accessible Income
(840,000x15%)
126,000 Baht
Use LTF for tax exemption
126,000 Baht
Example 2
Accessible Income
5,000,000 Baht
15 % of Accessible Income
(5,000,000x15%)
750,000 Baht
Use LTF for tax exemption
500,000 Baht
Tax Privilege table of LTF
Example of Tax exemption from investing in LTF
Net Accessible Income Tax 5% Tax 20% Tax 25% Tax 35%
No LTF Invest in LTF No LTF Invest in LTF No LTF Invest in LTF No LTF Invest in LTF
Accessible Income (yearly) 300,000 840,000 1,440,000 5,000,000
Less Expense
(40% but not more than 60,000 )
60,000 60,000 60,000 60,000
Income after expense 240,000 780,000 1,380,000 4,940,000
Less personal exemption 30,000 30,000 30,000 30,000
Less invest in LTF - 40,000 - 100,000 - 200,000 - 500,000
Total exemption 30,000 70,000 30,000 130,000 30,000 230,000 30,000 530,000
Net Income 210,000 170,000 750,000 650,000 1,350,000 1,150,000 4,110,000 4,410,000
Tax to pay 4,000 1,000 65,000 50,000 202,500 152,500 1,003,500 1,108,500
Tax Save - 2,000 - 15,000 - 50,000 - 175,000
Tax Privilege table of LTF
New personal income tax table
(From 1 January 2014 onward)
Net Income per year Max in each tier Tax rate (%) Tax in each tier Accumulate Tax in each tier
1 - 150,000 150,000 Exemption 0 0
150,001 - 300,000 150,000 5% 7,500 7,500
300,001 - 500,000 200,000 10% 20,000 27,500
500,001 - 750,000 250,000 15% 37,500 65,000
750,001 - 1,000,000 250,000 20% 50,000 115,000
1,000,001 - 2,000,000 1,000,000 25% 250,000 365,000
2,000,001 - 4,000,000 2,000,000 30% 600,000 965,000
4,000,001 Up - 35% - -
Redemption LTF before the condition period
1. First part
If investor make redemption of LTF and do not apply to holding period according to 5 or 7 years according to LTF condition (If invest in year 2016 onward), all capital gain from redemption of LTF investment will be include in personal income tax of that year.
2. Second part
The investor must return all tax exemption and pay the incremental penalty at the rate of 1.5% per month of previous tax exemption since April of the year that used for tax exemption until month that investor request for tax refund and exemption.
Information of LTF before investing