Corporate Income Tax Exemption for Investment in Large Commercial Electric Vehicles in Thailand

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Corporate Income Tax Exemption for Investment in Large Commercial Electric Vehicles in Thailand

On 9 September 2025, the Royal Gazette published the Royal Decree issued under the Revenue Code regarding the Corporate Income Tax Exemption for Income (No. 798) B.E. 2568 (2025) (“Royal Decree No. 798”), introducing a new corporate income tax (“CIT”) incentive to encourage investment in large commercial electric vehicles (“Large EVs”).

This incentive forms part of Thailand’s broader policy to accelerate the transition to zero-emission transportation, reduce greenhouse gas emissions from the commercial transport sector, and strengthen the domestic electric vehicle ecosystem. The incentive took effect on 10 September 2025.

Under this scheme, companies and juristic partnerships (“Eligible Taxpayers”) may claim additional CIT deductions (in addition to normal depreciation) for investments in qualifying Large EVs, subject to compliance with all statutory, technical, and procedural requirements.

Key Legal Framework

The incentive is implemented under the following key regulations:

  • Royal Decree No. 798, which establishes the overall framework for the tax incentive; and
  • Notification of the Director-General of the Revenue Department on Income Tax (No. 464) B.E. 2568 (2025) (“Notification of the Director-General No. 464”), which prescribes detailed eligibility conditions, deduction rates, and procedural requirements.

The principal eligibility requirements and applicable tax benefits under these regulations are summarized below.

Eligibility Requirements for the CIT Incentive

Eligible Taxpayers may claim additional CIT deductions for investments in Large EVs only where all of the following conditions are satisfied.

1. Qualifying Investment Period

The investment must be incurred during the period from 27 March 2025 to 31 December 2025.

2. Qualifying Large EVs

The investment must relate to Large EVs that meet all of the following requirements.

(a) Vehicle Type

  • Electric passenger vehicles, duly registered under the Motor Vehicle Act B.E. 2522 (1979) (“Motor Vehicle Act”), and operated for passenger transport in accordance with the standards prescribed under the Land Transport Act B.E. 2522 (1979) (“Land Transport Act”), including:
    • standard 1 (special air-conditioned buses),
    • standard 2 (air-conditioned buses),
    • standard 3 (non-air-conditioned buses),
    • standard 4 (double-decker buses),
    • standard 6 (semi-trailer buses), and
    • standard 7 (special-purpose passenger buses).
  • Electric trucks, duly registered under the Motor Vehicle Act, and operated for the transport of animals or goods in accordance with the characteristics prescribed under the Land Transport Act, including:
    • type 1 (pickup trucks),
    • type 2 (van trucks),
    • type 3 (tanker trucks),
    • type 4 (hazardous material trucks),
    • type 5 (special-purpose trucks), and
    • type 9 (tractor trucks).

(b) Asset Conditions

  • The vehicles must be new and unused;
  • Eligible for depreciation or amortization for tax purposes; and
  • Acquired and ready for use by 31 December 2025.

(c) No Overlapping Tax Incentives

  • The vehicles must not receive tax benefits under other laws; and
  • Must not be used in businesses that enjoy CIT exemptions under the Investment Promotion Act B.E. 2520 (1977), the Competitiveness Enhancement for Targeted Industries Act B.E.2560 (2017), or the Eastern Economic Corridor Act B.E. 2561 (2018).

Applicable CIT Deduction Rate

Where all of the above eligibility requirements are met, Eligible Taxpayers may claim additional CIT deductions calculated as follows:

  • 100% of the actual cost for Large EVs manufactured or assembled in Thailand, or
  • 50% of the actual cost for imported Large EVs.

Key Benefits and Limitations

Benefits

  • Meaningful tax savings, particularly for domestically manufactured or assembled Large EVs;
  • Reduced after-tax investment costs, improving project feasibility and capital efficiency; and
  • Alignment with ESG and sustainability objectives, which are increasingly important in corporate decision-making.

Limitations

  • A limited investment window, requiring timely procurement and deployment;
  • Strict eligibility and documentation requirements, with potential tax clawback risks; and
  • Incompatibility with other CIT incentive regimes, limiting flexibility for BOI-promoted or EEC-based businesses.

Conclusion

The Large EV CIT incentive is a targeted tax measure introduced to support Thailand’s transition to zero-emission commercial transportation while encouraging investment in large commercial electric vehicles. Under Royal Decree No. 798 and Notification of the Director-General No. 464, Eligible Taxpayers may claim additional CIT deductions for investments in qualifying Large EVs made within the prescribed investment period, subject to compliance with all eligibility and procedural requirements.

The incentive provides enhanced deductions of up to 100% of the investment cost for domestically manufactured or assembled Large EVs and 50% for imported vehicles. However, the benefit is subject to strict conditions, including vehicle type and usage requirements, asset characteristics, the prohibition of overlapping tax incentives, and compliance with documentation obligations. Accordingly, careful planning and coordination among tax, legal, and operational teams are essential to secure the incentive and avoid potential tax adjustments.

Author: Panisa Suwanmatajarn, Managing Partner.

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