Page 184 - Social Enterprise A New Business Paradigm for Thailand

The cooperatives that currently play the most significant economic and social roles are
agricultural cooperatives, savings cooperatives, and credit union cooperatives. Notably, savings

and credit union cooperatives function as financial institutions for grassroots populations who
are unable to access services from commercial banks. The rapid growth of these two types of
cooperatives in recent years has introduced governance risks, with the potential to cause
widespread harm. In 2019, the government responded by enacting the Cooperative Act (No. 3),
B.E. 2562 (2019), which added specific provisions for the regulation and oversight of savings and
credit union cooperatives.

The Cooperative Act established the Cooperative Development Fund, financed through
government budget allocations, to assist, promote, and support the development of cooperatives

and to provide loans for investment and working capital. Oversight is conducted by the
Cooperative Registrar, namely, the Director-General of the Department of Cooperative Promotion,
who is responsible for both promoting and regulating cooperative operations. Cooperative
Inspectors are authorized to examine cooperative activities and financial conditions and submit
their inspection reports to the Cooperative Registrar. Additionally, the Cooperative Auditing
Department serves as the official auditor for cooperatives.

1.1) Tax Obligations of Cooperatives

If a cooperative is established as a legal entity under the Cooperative Act, it is not classified as a
company or legal partnership under Section 39 of the Revenue Code and is therefore exempt from
corporate income tax. Additional tax exemptions are detailed in Table 6.5.

Table 6.5 Tax Obligations of Cooperatives and Cooperative Members
Cooperative Member
Corporate Income Tax Specific Business Tax Value-Added Tax
Income Tax
Cooperatives are not Exempt from specific Exempt from value- Exempt from income
subject to corporate business tax on loans added tax under tax on dividends and
income tax because, as provided to members Section 81 of the rebates; exempt from
legal entities under the or other cooperatives Revenue Code, such as income tax on savings
Cooperative Act, they under Section 91/3 (3) on the sale of account interest.
are not classified as of the Revenue Code. agricultural products,
companies or legal animals, animal parts,
partnerships under eggs, milk, etc., that
Section 39 of the have not been
Revenue Code. processed or
transformed into food
or other goods.

1.2) Procurement Benefits for Cooperatives
The Ministerial Regulation on Designated Goods and Procurement Methods to Promote or

Support Government-Desired Goods, B.E. 2563 (2020), as amended by the Ministerial Regulation

151