Draft Royal Decree issued by virtue of the Revenue Code Regarding Tax Exemption (No. ..) B.E. …. [Tax Measures to Promote Fundraising in Startup Enterprises]

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Draft Royal Decree issued by virtue of the Revenue Code Regarding Tax Exemption (No. ..) B.E. …. [Tax Measures to Promote Fundraising in Startup Enterprises]

The Cabinet, on 8 March 2022, has approved in principle of drafting Royal Decree issued by virtue of the Revenue Code regarding Tax Exemption (No. ..) B.E. …. (“Royal Decree”) as proposed by the Ministry of Finance which improves tax incentives measures to promote fundraising in startup enterprises according to previous Royal Decree regarding Tax Exemption (No. 597) B.E. 2559 and Royal Decree regarding Tax Exemption (No. 636) B.E. 2560.

This Royal Decree exempts personal income tax and corporate income tax on profits from transferring of shares and unit trusts in enterprise investment and investment in startup enterprises through venture capital. This tax exemption shall be effective from the date following the date of its publication in the Government Gazette until 30 June 2032 in order to enable Thai startup enterprises to raise more fund from the investors which will result in further expanding of the country’s economic system. The main points of this Royal Decree regarding the tax incentives are as follows:

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Investment TypesTax Benefits
1. Direct investment of an individual or a juristic partnership or a company registered in Thailand and a juristic partnership or a company registered overseas (previously not mentioned)An individual or a juristic partnership or a company both registered in Thailand and overseas will receive exemption on personal income tax or corporate income tax for income (only profit) from transferring of shares of startup enterprises. However, such startup enterprises shall operate on the targeted industries as supported by the government.
2. Investment through Venture Capital (VC)Corporate Venture Capital (“CVC”) will receive exemption on corporate income tax on income (only profit) from transferring of shares of startup enterprises only on transferring of shares of startup enterprise. However, such startup enterprises shall operate on the targeted industries as supported by the government. · Private Equity Trust (PE Trust) is not subject to corporate income tax. · Investors in CVC will receive exemption on personal income tax or corporate income tax on income (only profit) from transferring of CVC shares. · Investors in PE Trust will receive exemption on personal income tax or corporate income tax on income (only profits) from transferring of unit trusts on PE Trust.