This scenario involves the company providing a fixed monthly allowance to employees for their mobile phone usage, typically under a “Bring Your Own Device” (BYOD) policy.

The employee uses their personal mobile phone and the company contributes a pre-determined amount towards their bill.

General Criteria CIT Deductibility

• Company Deductibility (CIT): The fixed mobile phone allowance paid by the company to its employees is generally deductible for Corporate Income Tax as a staff expense (e.g., as part of payroll or employee welfare). This is because it is a direct cost incurred by the company to  facilitate employee communication for business purposes.
• Employee Assessable Income (PIT): The key aspect of a fixed allowance is that it is considered assessable income for the employee, subject to Personal Income Tax (PIT) under Section 40(1) of the Revenue Code. This means the company must include this allowance in the employee’s gross income when calculating and withholding PIT (P.N.D. 1). This is because it is a fixed payment to the employee, regardless of their actual business-related usage or an actual bill submitted.

Documentation Needed For CIT Deduction

• Payroll records: Clearly showing the mobile phone allowance as part of the employee’s remuneration.
• Withholding Tax Certificates (P.N.D. 1): Evidence that Personal Income Tax was properly withheld from the allowance and remitted to the Revenue Department. This is crucial for the company’s deductibility.
• Company policy on BYOD/Mobile Phone Allowance: A formal policy outlining the terms, conditions, and amounts of the fixed allowance provided to employees. This justifies the expense from a business perspective.
• Employee agreements/acknowledgments: Confirming the receipt and understanding of the allowance terms.

References

• Thai Revenue Code, Section 65 ter (3) (General expense deductibility).
• Thai Revenue Code, Section 40 (1) (Assessable income from employment, covering “any other money, property or other benefit received from hire-of-labor”).
• Thai Revenue Code, Section 50 (Withholding tax obligations for employers).