Previously, savings for retirements were normally invested in provident funds. Even though provident fund serves well as an investment for retirement, they are available to only a limited group of people, namely corporate or government employees. With provident funds, the amount invested by the employees is restricted to the amount contributed by their employers. There are people, including independent professionals, who want to invest in provident fund, but cannot do so because they are not corporate or government employees, or their employers are not involved in any provident fund. RMF is established precisely to meet this need and to provide people with an alternative for their savings for retirement

RMF is a tax privilege Investment Unit. It provide individuals who want to make a long term investment in order to receive tax-free fund later at their retirement's age, but don't need to receive any kinds of dividends during investment period.

• The actual amount of fund invested in RMF is exempted from tax, but the annual amount of exemption cannot exceed 15% of annual income, and the total amount, including contribution to provident fund, cannot exceed 500,000 Baht.
• RMF has an investment period longer than 5 years, if redeemed after the investor has reached 55 years of age, are eligible to tax exemption.
• Redemption due to disability or death of investor, the whole amount redeemed is tax exempted.

Investment conditions;

1. Investor must continue to purchase RMF at least once a year and must not pause to make such purchase more than one consecutive year.
2. Investor must purchase RMF with at least 3% of their annual income or 5,000 Baht each year.
3. Investor must invest in RMF for at least 5 years and continue to invest until the investor reaches 55 years of age.
4. If an investor violates one of the first two conditions or redeemed part of their portfolio of IU's before their maturity date, and he / she has already returned tax benefit received in the last five years. Moreover, the investor want to invest in RMF with his / her remained RMF immediately after already returned tax benefit in the same year, the investor's previous RMF holding time is still valid with the RMF holding time conditions.
5. If investor has invested in RMF for at least 5 years and investors is at least 55 years of age or being disabled person, investor can extend his/her RMF holding and he/she can also alter whether or not to make additional purchase.
6. Incomes invested in RMF that have already earned tax exemption can not be used to get tax exemption again in subsequent years.
7. Investor can not transfer or pledge RMF or using them as collateral.

Income types eligible for investing in RMF

• Incomes from employment: wages, salary, bonus, allowance, pension.
• Incomes from hiring fee
• Incomes from uninherited copyrights
• Incomes from independent profession: law profession, medical profession, engineering, architecture, accountancy, and art.
• Incomes from real estate construction
• Incomes from commerce, agriculture, manufacturing, transportation.
  

Tax exempted income calculation

To have better understanding of tax benefit of RMF, we will show you how to calculate the amount of income eligible for tax privilege.

Example :  Mr. A is a corporate officer has annual income of 600,000 Baht, this year he also invests 5% of his income equal 30,000 in provident fund. If Mr. A want to invest in RMF, how much can he invest in the IU's this year to get the maximum tax privilege.

Since, the 15% of Mr. A's income equal 600,000 X 15% = 90,000 Baht As a result, Mr. A can invest 15% of his income after deduct provident fund contribution or 90,000-30,000 = 60,0000 Baht in RMF because, the income is in the range of maximum tax exempted income allowed.

Example :  Mr. B is a corporate officer has annual income for working with a company of 1,500,000 Baht and earns additional of 1,000,000 a year from independent profession. Totally he's made 2,500,000 a year. Mr. B is a member of the company's provident fund, he pays 5% of his income or 75,000 Baht in the fund. If he wants to invest 250,000 Baht of his income in RMF, can he get tax exemption for all the money he invests?

Since, the 15% of Mr. B's income equal 2,500,000 X 15% = 375,000 Baht Maximum tax exempted income is 375,000 less provident contribution 75,000 = 300,000 Baht. Mr. B wants to invest 250,000 Baht of his income
So, he can get tax exemption for all the money he invests.