06 Aug Thailand COVID-19 Update – July 2020
The Thailand COVID-19 Update for July 2020 includes on overview of the process for certain categories of foreigners to return to Thailand and updates on Pre-Work Permit Approval extensions at the One Stop Service Center and Pre-Visa Approval and Pre-Work Permit Approval applications at the BOI, OSSC, and IEAT, and tax news including tax benefits for SMEs affected by the outbreak of COVID-19, tax benefits for domestic seminars, and the reduction of Land and Building Taxes.Download PDF
Process for Certain Categories of Foreigners to Return to Thailand
On June 29, 2020, the Civil Aviation Authority of Thailand (CAAT) announced that effective July 1, 2020, certain categories of foreigners including “foreigners who are a spouse, parents, or children of a Thai national, foreigners who hold a valid certificate of residence or permission to take up residence (PR holder), foreigners who hold a valid work permit or are allowed to work in the Kingdom including their spouse or children, and foreigners who are students of educational institutions approved by Thai authorities including the parents or guardians of the students” will be allowed to enter Thailand.
However, all foreigners entering Thailand must comply with the conditions, time limits, and rules set under the Immigration Act, Communicable Diseases Law, Air Navigation Law, and the Emergency Decree. This means that foreigners in the permitted categories must comply with the Ministry of Foreign Affairs (MFA) Announcement previously announced in May. All foreigners are still required to contact a Thai Embassy/Consulate located in the country they are residing and strictly follow the MFA Announcement.
A summary of the process for foreigners who qualify to return to Thailand is as follows:
1. The foreigner must contact a Thai Embassy/Consulate at least 10 days before the scheduled departure date and apply for a “Certificate of Entry into the Kingdom of Thailand (COE).” The following documents are required:
1.1 Work permit booklet/copy of work permit or letter of work permission from an authorized government agency such as the Ministry of Labour, the BOI, and the IEAT.
1.2 Valid health insurance policy that covers medical expenses in Thailand for COVID-19 of up to at least USD 100,000
2. The Thai Embassy/Consulate will forward the foreigner’s application to the Ministry of Foreign Affairs for approval. If approved, the Thai Consulate will be instructed to issue a “Certificate of Entry into the Kingdom of Thailand” to the foreigner.
3. In order to travel to Thailand, the foreigner will need to carry and be able to present the following documents:
3.1 Certificate of Entry into the Kingdom of Thailand
3.2 A completed and signed “Declaration Form” obtained from a Thai Embassy or Consulate.
3.3 A “Fit to Fly” Health Certificate issued within 72 hours before departure.
3.4 A medical certificate with a laboratory result indicating that COVID-19 is not detected by RT-PCR method, within 72 hours before departure.
3.5 A copy of the foreigner’s Health Insurance Policy with at least USD 100,000 coverage for COVID-19 in Thailand
4. Upon arrival in Thailand, the foreigner must go into 14-day quarantine in a government designated Alternative State Quarantine (ASQ) at their own expense and comply with all health regulations under the Thailand’s Emergency Decree.
Note: ASQ are hotels in various locations in Thailand that have been approved for quarantine.
IMPORTANT ADVICE: The foreigner should ensure that his/her full name that appears on all issued documents, including the Health Insurance Policy, matches and is spelled exactly the same as the name that appears in the foreigner’s passport.
Dej-Udom & Associates’ Analysis:
1. The Government also officially extended the Emergency Decree for another one month until August 31, 2020. Additionally, the CAAT does not mention anything about the extension of the Entry Ban Measure in the latest CAAT Announcement (dated July 1, 2020) either. The content of the CAAT Announcement definitely implies that they are now allowing certain flight categories and certain type of foreigners to enter Thailand, but we find this very misleading. Also, only a limited number of people will be allowed to enter each day. Initially, only 200 people from the 6 approved categories will be allowed to enter each day. Overall, we don’t believe many people will actually be allowed to enter Thailand and that this is mostly about keeping a positive investment climate for Thailand.
2. Although it looks like the Government will allow these new categories of foreigners to enter Thailand, it is going to be very difficult for them to enter Thailand in the short term. This is because the permitted foreigners still have to comply with all of the processes, pre-arrival requirements, and condition set by the MFA. There are many documents that must be prepared and approved before a foreigner can obtain approval from the Thai Embassy and Ministry of Foreign Affairs. The entire process is complicated and time consuming.
3. The CAAT Announcement still limits the types of flights allowed into Thailand and foreigners will only be allowed to fly into Thailand on Repatriation Flights and Cargo Flights. At this time, even if a foreigner can complete the application process to return, they will still have to find and use an allowed repatriation or cargo flight. The ban on international flights has not been lifted, so even finding a flight to Thailand will be challenging.
4. For a BOI promoted company, they still need to submit a special request to bring in a foreign national employee to Thailand. The BOI company may apply for a Pre-Visa Approval (PVA) for foreign national employees who will be working under specified positions, but the BOI wishes to focus on high level executive employees and experts whose positions will have significant impact on the approved BOI project as described above.
5. As per the current Alternative State Quarantine (ASQ) requirement, although the family members of the foreign national employees will be permitted to enter Thailand, they will still be required to quarantine in an ASQ hotel for 14 days. The cost of the quarantine stay will be covered by the returning foreigner, not the Thai government. At this time, the rates for a 14-day stay at an Alternative State Quarantine hotel run between THB 30,000 to THB 100,000 per person. Companies will need to factor in this cost for their returning employees.
PWPA Extensions at the OSSC
During a meeting with the Head of the Work Permit Section at the One Stop Service Center (OSSC) in mid-July, we raised the issue of the validity of a Pre-Work Permit Approval Letter (PWPA) towards the timeline involved for obtaining a Certificate of Entry (COE) and non-B visa at a Thai Embassy before arrival and the 14-day quarantine period post-arrival. A PWPA is valid for 30 days upon issuance and can be extended for 15 days for a total of 45 days of validity. The work permit applicant has to complete all relevant processes and obtain a work permit in this 45-day period. However, due to the added steps and the need for the 14-day quarantine, applicants may not be able to complete the work permit process in 45 days. We explained this to the Head of the Work Permit Section at the OSSC and our concerns about applicants not being able to complete the work permit issuance final step process within 45 days, and the Head said that the OSSC would allow for another 15-day extension for the PWPA. Now, work permit applicants using the OSSC have up to 60 days to complete all relevant processes and obtain a work permit (The series of extension will be 15 days at a time i.e. original 30 days PWPA + 15 days 1st extension + 15 days 2nd extension).
However, we explained to the Head that under the current circumstances, it is very difficult to predict the timeline for the COE and visa process at a Thai Embassy. It is very possible that it will take longer and the applicant will not be able to complete the work permit process within 60 days. The Head then told us that if there is any case in which the employer foresees it will take longer than 60 days, a specific request with the justifiable reason may be made to the OSSC, and the Head will consider it on a case-by-case basis to allow for more extensions.
Remark: We are of the opinion that the Employment Department at the OSSC understands the situation and is willing to cooperate if the work permit applicant encounters any difficulties or delays in entering Thailand.
Pre-Visa Approval and Pre-Work Permit Approval Applications
For BOI: The BOI issued the Announcement to accept Pre-Visa Approval (PVA) applications effective July 1, 2020. Although Pre-Visa Approval applications can be filed, the BOI has announced specific conditions for accepting the applications. Foreign national employees can only be under specified positions, and the BOI wishes to focus on high level executive employees and experts whose positions will have significant impact on the approved BOI project:
1. Job position must be for executive level / high management.
2. Job position must be related to production areas.
3. Job position must have significant impact on the approved BOI project.
For IEAT: The IEAT is accepting PVA applications. There are no conditions or restrictions for filing the Pre-Visa Approval application.
For OSSC: The Employment Department at the OSSC is accepting Pre-Work Permit approval (PWPA) applications. There was no official announcement for this, and there are no specific restrictions or conditions for filing the Pre-Work Permit Approval.
For non-BOI: On Monday, July 20, 2020, the Employment Department began accepting Pre-Work Permit Approval (PWPA) applications.
The BOI is only accepting PVA applications for certain positions as explained above in order to help the Ministry of Foreign Affairs screen applications. Accordingly, the BOI will carefully and cautiously select/focus on specific job positions that meet the above three conditions. We understand that if BOI approves the PVA, when the applicant further submits the PVA to request a Certificate of Entry at a Thai Embassy, it will be easier for the MFA to review the application and approve it. A summary of the steps to obtain a COE, visa, and work permit under the BOI process is as follows:
• The Employer applies for a Pre-Visa Approval at the BOI.
• The PVA letter and non-B/O visa packages are sent to the applicant in their home country.
• The applicant and family apply for a COE at the Thai Embassy in their home country.
• The Thai Embassy sends their cases to Thailand for MFA approval. After approval, the Thai Embassy issues the COE to the applicant according to the MFA’s Order.
• After receiving COE approval, the applicant and family obtain both COE and non-B /O visas.
• The applicant and family arrange seats on a repatriation or cargo flight to Thailand
• The Applicant and family enter Thailand with Non B/O visas.
• The applicant obtains a Digital Work Permit and long-term visas in the final step process.
Corporate Law News
Tax Benefits for SMEs affected by the Outbreak of COVID-19
On July 13, 2020, Royal Decrees (No. 707), (No. 708) and (No. 709) became effective for the purpose of assisting small and medium-sized enterprises (SMEs) directly or indirectly affected by COVID-19. The summary of each Decree is as follows:
I. Under Royal Decree (No. 707), an income tax exemption will be granted to SMEs taking out loans under the soft loans scheme pursuant to the resolutions approved by the Cabinet, dated March 10, 2020, for the amount of 50% of the interest incurred from such scheme between April 1, 2020 and December 31, 2020. However, the eligible SMEs must be a company or juristic partnership receiving income not exceeding 500 million Baht from the last 12-month accounting period ended on or before September 30, 2019, also the eligible company must not exceed 200 employees.
II. Under Royal Decree (No. 708), an income tax exemption will be granted to companies or juristic partnerships for 200% of wages made to the insured under Section 33 of the Social Security Act between April 1, 2020 and July 31, 2020 (Only for wages of not more than 15,000 Baht per month). The eligible company or juristic entity shall:
1. Receive income not exceeding 500 million Baht from the last 12-month accounting period ended on or before September 30, 2019, also the company must not exceed 200 employees;
2. The number of employees under the social security regime on the last days in April, May, June, and July shall not be less than the number in the last days in March;
3. Have never claimed for an income tax exemption under the other Royal Decrees relating to this matter, whether in whole or in part
III. Under Royal Decree (No. 709), tax benefits will be granted to the following participating in debt restructuring made between January 1, 2020 and December 31, 2021:
1. Income tax, Value Added Tax (VAT), Special Business Tax (SBT), and Revenue Stamp will be exempted for debtors of financial institutions and financial institutions, including debtors of other creditors, and other creditors, for the income derived from the transfer of assets, sale of goods and services, and the execution of instruments, resulting from debt restructuring of financial institutions in accordance with the prescription of the Bank of Thailand (BOT)
2. Income tax will be exempted for debtors of other creditors for the income derived from the quittance of other creditors participating in debt restructuring in accordance with the prescription of the BOT
3. Income tax will be exempted for debtors of financial institutions for the income derived from the transfer of assets mortgaged by debtors of financial institutions with the financial institutions to any person other than creditors as a financial Institution, including the execution of instrument resulted from such transfer of assets
Debtors of financial institutions must pay debts to the creditors as a financial institution participating in debt restructuring in accordance with the prescription of the BOT, amounting to no more than of the outstanding debts owed to the financial institutions or the obligations in accordance with the security agreement made with financial institutions
4. Income tax will be exempted for debtors of other non-financial institutions for the income derived from the transfer of assets mortgaged by debtors of other non-financial institution with other non-financial institution to any person other than other non-financial institutions, including the execution of instruments resulting from such transfer of assets
Debtors of other non-financial institutions must pay debts to the creditors as a non-financial institution participating in debt restructuring in accordance with the prescription of the BOT, amounting to no more than of the outstanding debts owed to other non-financial institutions or the obligations in accordance with the security agreements made with other non-financial institutions.
Tax Benefits for Domestic Seminars
Royal Decree No.697 has been issued to grant a tax exemption of 100% of the income taxes for companies or juristic partnerships with expenses spent on convening trainings and seminars for its own employees in Thailand between January 1, 2020 and December 31, 2020.
Such expenses include training and seminar rooms, accommodation, transportation, or other expenses relating to holding domestic trainings and seminars, as well as service charges made to tourism business entrepreneurs under the laws concerning tourism business and guides.
Update of Tax Reduction for Land and Building Taxes
On June 11, 2020, the new Royal Decree regarding the Reduction of Land and Building Tax B.E. 2563 (2020) became effective. The purpose of this law is to reduce tax rates up to 90% for the 2020 tax year for any taxpayers who own or occupy the following land or buildings and liable for a tax payment under the Land and Building Tax Act B.E. 2562 (2019):
• Land or buildings utilized for agricultural purposes;
• Land or buildings utilized for residential purposes;
• Land or buildings utilized for other purposes apart from agriculture and residence; and
• Vacant/Non-Utilized Land or buildings.
The material contained herein is only provided for information purposes. No part thereof may be deemed to constitute legal advice or the opinions of this law firm or any of its attorneys. Whilst every effort has been made to verify the contents of the material contained herein, we do not represent, warrant, undertake, or guarantee that the information contained in this newsletter is correct, accurate, or complete. Legal advice must be sought before acting on any information contained herein.