When a company provides life insurance to its employees as a fringe benefit, the deductibility for Corporate Income Tax (CIT) in Thailand depends on the nature of the policy and whether it qualifies as an ordinary and necessary business expense for employee welfare. There are also important considerations regarding Personal Income Tax (PIT) for the employees.

General Criteria CIT Deductibility

• Benefit for Employees/Welfare: The life insurance policy must genuinely be for the welfare of the employees and provided under a general company policy to a group of employees (not just specific individuals).

• Beneficiary: If the company is the beneficiary of the policy (e.g., key-man insurance), the premiums are generally not deductible for CIT, as the company receives the benefit.

• Deductible for CIT: If the employees or their designated beneficiaries are the recipients of the insurance payout, the premiums paid by the company are generally deductible as a staff welfare expense for CIT.

• Employee Assessable Income (PIT): The premium paid by the company on behalf of the employee for their life insurance is generally considered an assessable income for the employee (a taxable fringe benefit), subject to Personal Income Tax (PIT) and withholding tax (P.N.D. 1).

Documentation Needed For CIT Deduction

• Insurance Policy Documents: Copy of the group life insurance policy or individual policies, clearly showing the insured individuals and beneficiaries.

• Payment Receipts/Invoices: From the insurance company for premiums paid by the company.

• List of Insured Employees: Matching the company’s payroll.

• Company Welfare Policy: Documenting the provision of such benefits to employees.

• Withholding Tax Certificates (P.N.D. 1): Showing that the insurance premium amount (as a benefit) has been included in the employee’s assessable income and relevant tax withheld.

References

• Thai Revenue Code, Section 65 ter (3) (General expense deductibility for welfare benefits)

• Thai Revenue Code, Section 40(1) (Assessable income from employment, which includes fringe benefits).

• Revenue Departmental Instructions and Rulings (e.g., often re-characterizing insurance premiums paid by employer as employee’s assessable income).

• Ministerial Regulation No. 126 (B.E. 2509) (relevant to welfare benefits, though specific interpretations for insurance apply).