Tax Benefit
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.
**Remark On January 1, 2020, onwards, investors who are investing in Long Term Equity Fund (LTF) are not eligible for tax deductions.
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.
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 (50% but not more than 100,000 ) |
100,000 | 100,000 | 100,000 | 100,000 | ||||
| Income after expense | 200,000 | 740,000 | 1,340,000 | 4,900,000 | ||||
| Less personal exemption | 60,000 | 60,000 | 60,000 | 60,000 | ||||
| Less invest in LTF | - | 40,000 | - | 100,000 | - | 200,000 | - | 500,000 |
| Total exemption | 60,000 | 100,000 | 60,000 | 160,000 | 60,000 | 260,000 | 60,000 | 560,000 |
| Net Income | 140,000 | 100,000 | 680,000 | 580,000 | 1,280,000 | 1,080,000 | 4,940,000 | 4,440,000 |
| Tax to pay | 0 | 0 | 54,500 | 12,000 | 185,000 | 135,000 | 1,994,000 | 1,819,000 |
| Tax Save | - | - | - | 42,500 | - | 50,000 | - | 175,000 |
Tax Privilege table of LTF
New personal income tax table
(From 1 January 2017 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 - 5,000,000 | 2,000,000 | 30% | 600,000 | 965,000 |
| 5,000,001 Up | - | 35% | - | - |
Redemption LTF before the condition period