Thailand Approves Strategic Stimulus Fund Reallocation to Address Trade Pressures and Strengthen Key Industries
The Thai government has approved the strategic reallocation of funds from its Economic Stimulus Budget to support those affected from the U.S. tariff measures. The reallocated resources will prioritize rapidly implementable projects with demonstrable economic impact, focusing on mitigating U.S. tariff effects, strengthening the agricultural sector, and supporting small-scale entrepreneurs.
Economic Stimulus Budget Framework
Phase 1: Initial budget allocation supports 481 projects encompassing 8,939 activities across infrastructure investment, tourism development, agricultural modernization, and community economic programs.
Phase 2: Secondary budget allocation targets strategic industries and establishes a student loan fund. Priority industries include:
Next-Generation Automotive
Intelligent Electronics
High-Quality Tourism
Agriculture and Biotechnology
High-Value Food Processing
Robotics
Aviation
Digital Industry
Comprehensive Medical Industry
Biofuels and Biochemicals
Strategic Priorities for Fund Reallocation
Government officials have emphasized that reallocated funds will be deployed exclusively for projects demonstrating rapid execution capabilities and measurable outcomes. Priority areas encompass:
Supporting exporters from U.S. tariff affects
Strengthening the agricultural sector
Providing targeted assistance to small and medium enterprises (SMEs)
U.S. Trade Relations Context
Alongside budget management initiatives, trade negotiations with the U.S. remain a critical policy concern. Discussions regarding rules of origin for Thai exports have been deferred, while the establishment of a 40% local content requirement remains unresolved. Thai government officials maintain that adopting a definitive position is premature until the U.S. presents its formal policy stance, enabling Thai policymakers to formulate an appropriate strategic response. The budget as allocated will be measured to support the affected until this has come to the conclusion.
Partnership Talks for Sustainable Growth
The Minister of Finance has recently held discussions with members of the Congressional Delegation of the U.S. on various below issues for further consideration and collaboration.
Investment in Thailand – The U.S. delegation recognized Thailand as a country with strong investment potential.
Public Debt – Thailand’s public debt level is relatively low compared to other ASEAN member countries.
64.2% of its Gross Domestic Product (“GDP”)
99.2% domestic debt.
0.8% external debt.
Trade Deficit and Reciprocal Tariff – reaffirmed its commitment to the agreement, including
Increasing imports of the U.S. agricultural products, energy supplies, and military equipment;
Reducing non-tariff barriers (NTBs); and
Monitoring and regulating the transshipment of goods through third countries.
Conclusion
The stimulus fund reallocation demonstrates Thailand’s commitment to balancing immediate economic relief with long-term strategic positioning. Through measures to mitigate U.S. tariff pressures, strengthen agricultural competitiveness, and support SME resilience, the government seeks to stabilize near-term economic performance. Simultaneously, channeling resources into high-potential industries positions Thailand for sustained growth and enhanced global competitiveness.
Thailand’s Strategic Tax Reform: Tax Credit Incentives to Drive Investment and Startup Growth Under the Global Minimum Tax Framework
Thailand is implementing comprehensive tax reform measures to strengthen its competitive position within the evolving global investment landscape. In alignment with the Organization for Economic Co-operation and Development (OECD) Global Minimum Tax (GMT) framework, the government has introduced Qualified Refundable Tax Credits (QRTCs) designed to attract high-quality foreign direct investment and foster domestic innovation. These strategic initiatives, coupled with an enhanced startup support program, aim to bolster national competitiveness, retain strategic industries, and promote sustainable economic growth.
Legislative Framework and Approval
On August 1, 2025, Thailand’s National Committee on Enhancing Competitiveness for Targeted Industries Policies formally approved amendments to the National Competitiveness Enhancement Act of 2017. This legislative milestone establishes the foundation for implementing new investment rights and incentives, including refundable tax credits, in direct response to GMT adoption requirements.
OECD Alignment and Global Minimum Tax Response
The GMT framework mandates that multinational enterprises (MNEs) with consolidated global revenues exceeding €750 million (approximately THB 28 billion) maintain a minimum effective tax rate of 15% across all operational jurisdictions. When host countries offer tax incentives that reduce the effective tax rate below this threshold, the MNE’s home country reserves the right to impose supplementary taxes to capture the differential.
To preserve Thailand’s attractiveness as a foreign investment destination, the National Committee has strategically approved amendments introducing QRTCs as a new category of investment incentives. This mechanism positions Thailand to effectively compete for investment capital, maintain existing manufacturing operations in targeted sectors, and stimulate new investments that enhance competitiveness while driving sustainable economic development.
Qualified Refundable Tax Credit Structure
These tax credits will be available to qualified foreign investors, particularly those engaged in:
Manufacturing and Research & Development Operations: Establishing or expanding production facilities and R&D centers in Thailand
High-Value Employment Generation: Creating positions that promote skilled workforce development and knowledge transfer
Sustainable Innovation: Advancing environmental sustainability through green technology adoption and innovative solutions
The credits function as flexible instruments that can be applied toward various tax obligations, including corporate income tax, top-up tax under GMT provisions, and other applicable taxes and duties. Should credit balances remain after tax applications, investors may request cash refunds within a four-year period, subject to established eligibility criteria and regulatory requirements.
Enhanced Startup Support Framework
Complementing international tax policy reforms, the Thai government has prioritized domestic innovation through targeted support for Thai startups operating in deep technology (Deep Tech) sectors where Thailand demonstrates competitive advantages. Priority sectors include agriculture and food technology, biotechnology, robotics and automation, artificial intelligence, medical technology, and green industries.
Support is delivered through a Matching Fund mechanism administered under the Competitiveness Enhancement Fund, managed by the Board of Investment (BOI). The program operates under the following parameters:
Co-Investment Requirements: Startups must secure minimum co-investment of THB 10 million from venture capital funds registered with the National Innovation Agency (NIA) or established by licensed financial institutions operating in Thailand
Matching Fund Provision: The BOI may provide matching funds equivalent to venture capital contributions, capped at THB 20 million per project
Ownership and Control Requirements
To ensure direct benefits accrue to Thai-owned enterprises, the following ownership structures are mandated:
Thai Majority Ownership: Thai nationals or Thai-registered entities must maintain at least 51% shareholding
Founder Control: founders must collectively retain at least 60% of total shares
Therefore, as long as the startups remains under this promotional project or has not yet received the full amount of matching funds from the BOI, it is required to maintain a minimum of 51% Thai shareholding. Additionally, the founders, including both Thai and foreigners, must collectively retain at least 60% of the control throughout this period.
Strategic Implications and Outlook
The amendment to the National Competitiveness Enhancement Act provides the BOI with sophisticated policy instruments to reinforce investor confidence during a period of significant transformation in global tax policy. While QRTC implementation awaits Cabinet approval and subsequent regulatory framework development by the Revenue Department, this initiative represents a crucial evolution in Thailand’s investment promotion strategy.
Simultaneously, the strengthened startup promotion measures will expand market opportunities and accelerate the development of Thai Deep Tech enterprises, further establishing Thailand’s position as a regional hub for innovation-driven, sustainable investment.
These coordinated policy measures demonstrate Thailand’s proactive approach to navigating the complexities of international tax harmonization while maintaining its competitive edge in attracting both foreign direct investment and nurturing domestic innovation capabilities.
Investment: Government Advances 99-Year Property Lease Law to Boost Investment
The Thai government is accelerating efforts to amend the Right-Based Property ActB.E. 2562 (2019), aiming to extend the lease term for real estate from 30 years to 99 years. This legislative push is designed to attract foreign investment, stimulate economic growth, and support key national policies such as the “Housing for Thais” initiative, the Land Bridge project, and land reclamation efforts. The proposed law introduces a novel legal concept known as “right-based property”, which offers a framework for long-term property leases while ensuring assets revert to state ownership after the lease term expires. This article explores the objectives of the law, the significance of right-based property, and its anticipated economic impact.
Understanding Right-Based Property:
Right-based property, as defined under the Right-Based Property Act B.E. 2562 (2019), is a new category of property introduced to enhance the economic utility of real estate in Thailand. According to the Civil and Commercial Code, “property” refers to tangible objects, while “assets” encompass both tangible and intangible items that hold economic value and can be legally possessed. Real estate, or immovable property, includes land, structures permanently affixed to it, and associated property rights. Movable property covers all other assets, including related rights.
Right-based property, however, is a distinct legal construct that refers to the right to use and benefit from immovable property for a specified period, as stipulated in the Right-Based Property Act B.E. 2562 (2019). Unlike traditional leases under the Civil and Commercial Code, which are limited to contractual rights between parties, right-based property can be transferred, inherited, or used as collateral for debt through mortgaging. This makes it a more flexible and economically viable instrument for long-term investment.
To establish right-based property, the owner of immovable property, such as titled land, land with buildings, or condominium units, must apply to the relevant authority, typically the Land Department. The application requires the submission of documents specifying the lease term, which is currently capped at 30 years but proposed to be extended to 99 years. Once registered, a certificate of right-based property is issued, and the property cannot be subdivided or merged with other parcels during the lease term. Any modifications, such as new constructions, revert to the original property owner upon the lease’s expiration, unless otherwise agreed.
Government’s Push for 99-Year Leases:
The Thai government is prioritizing the amendment of the Right-Based Property Act B.E. 2562 (2019) to extend the maximum lease term to 99 years. The amendment aims to remove legal barriers to foreign investment, encourage large-scale real estate projects, and attract high-income individuals and skilled professionals to Thailand.
The government anticipates that the extended lease term will support transformative projects, including:
1. Land Bridge Project: A mega-infrastructure initiative to connect the Gulf of Thailand and the Andaman Sea, fostering trade and logistics.
2. Land Reclamation: Private-sector-led coastal reclamation projects to create new investment zones, with long-term leases incentivizing participation.
3. Housing for Thais: Affordable urban housing schemes integrated with reduced public transport costs (e.g., 20-baht flat-rate fares) to lower living expenses for middle-income Thais.
4. Green Energy Initiatives: Long-term land leases for projects like solar farms, particularly in the Northeast, to produce affordable electricity (estimated at 3 baht per unit) for economic hubs like Bangkok and data centers.
5. Talent Hub Development: Attracting high-skilled global professionals by offering long-term property rights, enhancing Thailand’s appeal as a destination for talent.
Economic and Legal Implications:
The proposed law is expected to yield significant economic benefits while addressing legal loopholes. Key advantages include:
• Increased Foreign Investment: The 99-year lease term aligns Thailand with countries like the United Kingdom, where leases can extend up to 99 years. This makes Thailand more competitive in attracting foreign investors for high-end real estate projects, such as luxury hotels, office buildings, and residential complexes. The influx of capital is expected to stimulate economic activity without funds leaving the country.
• Enhanced Transparency: The law aims to curb illegal practices, such as the use of Thai nominees to bypass foreign ownership restrictions. By requiring assets under the right-based property scheme to be managed by the Treasury Department and revert to state ownership after 99 years, the government ensures national control over land resources, refuting claims of “selling out” the country.
• Support for Diverse Industries: Beyond real estate, the law facilitates long-term investments in sectors like international education (e.g., foreign ownership of international schools) and financial hubs, fostering economic diversification.
• Addressing Demographic Challenges: With Thailand’s population projected to decline to 37 million within 50 years, the law seeks to attract high-skilled foreign workers to bolster economic growth. The extended lease term provides the stability needed to encourage long-term residency.
Safeguards and Conditions:
To address concerns about national sovereignty, the government has incorporated safeguards into the proposed law. Notably, assets under the right-based property scheme will transfer to the Treasury Department upon lease expiration, becoming part of the nation’s sovereign wealth. Agricultural land is explicitly excluded from the program to protect food security and rural livelihoods. Additionally, any property encumbered by mortgages or other rights requires consent from relevant parties before entering the right-based property scheme.
Legislative Timeline:
The government is fast-tracking the amendment process, aiming for parliamentary approval and enactment by 2025.
Conclusion:
Thailand’s push to extend property lease terms to 99 years through the Right-Based Property Law represents a strategic effort to unlock economic potential, attract global investment, and support transformative national projects. By introducing the concept of right-based property, the government offers a flexible, legally robust mechanism to enhance the economic utility of real estate while safeguarding national interests. If enacted as planned in 2025, this law could position Thailand as a leading destination for foreign capital and talent, driving sustainable economic growth in the face of demographic and global challenges.
Closing Nominee Loopholes: Thailand’s Legal Reform to Safeguard Property Ownership
On 24 June 2025, the Cabinet formally acknowledged the “Findings and Recommendations of the Ombudsman Regarding the Ownership or Possession of Land or Real Estate by Nominees Acting on Behalf of Foreigners.” These recommendations were submitted in response to growing concerns over the circumvention of land ownership laws by foreign nationals through the use of Thai nominees.
This initiative follows the discovery of widespread land and property acquisitions by foreign nationals, raising significant concerns regarding national security, economic stability, and equality of opportunity for Thai citizens. In numerous instances, foreigners have circumvented legal restrictions by utilizing Thai nominees to bypass requirements such as marriage to Thai citizens, land ownership through Thai children, long-term leases, and company structures that disguise actual control.
One prevalent mechanism involves establishing a Thai-registered legal entity that appears to be locally owned but is ultimately controlled by foreign interests through nominee shareholders or preference shares. This practice not only undermines the intent of existing legislation but also contributes to rising land prices, thereby reducing accessibility for Thai nationals—particularly in high-demand areas such as Bangkok and Chiang Mai.
Key Recommendations
1. Department of Business Development (DBD)
The DBD has been designated to play a central role in preventing and monitoring nominee arrangements, particularly in legal entities with foreign shareholding:
System Development
Developing an AI-driven system to process and analyze corporate data to identify high-risk juristic persons potentially acting as nominees.
Amendment to the Foreign Business Act B.E. 2542 (1999) (FBA) to include:
A broader definition of “foreigner” to encompass those exercising control or management through Thai nominees.
Clear definitions of “nominee” and “disguised transaction” to cover indirect ownership and concealed financial or property dealings.
Explicit inclusion of both direct and indirect shareholding in regulatory scrutiny, with enhanced qualifications for the 51% Thai shareholders.
Classification of legal entities controlled through preference shares as foreign juristic persons.
Updated requirements for registered capital, including mandatory submission of evidence demonstrating actual payment (e.g., bank statements) to prevent false declarations.
Designation of FBA violations as predicate offenses under the Anti-Money Laundering Act, enabling asset seizure during investigations.
Granting the DBD investigative and arrest powers in nominee-related offenses.
2. Department of Lands
Enforcement Guidelines
Issuance of clear enforcement guidelines and their widespread circulation to prevent land ownership by foreign nationals through nominee arrangements.
Amendments to the Land Code to:
Increase penalties for foreigners violating land ownership laws.
Forfeit unlawfully held land to the state without compensation to the foreign holder.
3. Lawyers Council of Thailand
Code of Ethics
Introduction and enforcement of a binding code of ethics that prohibits legal professionals from advising on or facilitating nominee structures.
Professional Conduct Rules
Establishment of professional conduct rules to ensure lawyers do not support arrangements that bypass foreign ownership restrictions.
Implementation Framework
The Ministry of Commerce has been designated as the principal agency to deliberate on this matter in collaboration with relevant agencies and to submit the outcome of such deliberations to the Cabinet Secretariat within 30 days for further consideration by the Cabinet.
The Cabinet has acknowledged the Ombudsman’s findings and recommendations, directing the Ministry of Commerce to conduct a comprehensive review of the issue. The Ministry of Commerce will collaborate with 13 other agencies, including Ministry of Finance, Ministry of Agriculture and Cooperatives, Ministry of Natural Resources and Environment, Ministry of Interior, Ministry of Justice, Ministry of Labor, Ministry of Industry, Board of Investment, Royal Thai Police, Anti-Money Laundering Office, Internal Security Operations Command and Bank of Thailand.
This joint effort aims to reach a definitive resolution within 30 days, with the Ministry of Commerce responsible for submitting a summary of its findings, actions taken, and overall recommendations to the Cabinet Secretariat for further consideration.
Conclusion
The Cabinet’s recognition of the Ombudsman’s findings represents a crucial step in addressing a long-standing loophole in Thailand’s property ownership regulations. While foreign investment remains vital to Thailand’s economy, the misuse of nominee structures has distorted the property market and undermined legal integrity. The lack of unified enforcement and ambiguous legal definitions have limited the government’s ability to effectively regulate foreign participation in land ownership.
With a whole-of-government approach now underway, Thai authorities aim to restore fairness, uphold legal safeguards, and ensure that land and property ownership align with national interests. The forthcoming recommendations from the Ministry of Commerce and its partner agencies will be decisive in shaping future land policies and enforcement mechanisms.
How the Act for the Establishment of and Procedure for the Tax Court (No. 3) B.E. 2568 (2025) Transforms Tax Dispute Litigation
Background
The litigation of tax disputes in Thailand has historically been governed by the Act for the Establishment of and Procedure for the Tax Court B.E. 2528 (1985) and the Regulation on Tax Cases B.E. 2544 (2001). Since having been enforced until the enforcement of their amendments, the Tax Court’s jurisdiction has been confined exclusively to civil matters. In cases involving both tax-related civil and criminal issues, plaintiffs have been required to bifurcate their proceedings, filing criminal complaints with criminal courts having jurisdiction over the cases while pursuing civil remedies through the Tax Court.
Legislative Reform
This procedural framework is set to undergo significant transformation under the Act for the Establishment of and Procedure for the Tax Court (No.3) B.E. 2568 (2025), which substantially expands the Tax Court’s jurisdiction to encompass criminal tax offenses. This expansion reflects the legislature’s recognition that adjudicating tax-related criminal matters requires specialized expertise in tax law and revenue collection systems.
Key Amendments
1. Expansion of Criminal Jurisdiction
The Tax Court is now vested with the authority to adjudicate criminal cases arising under the following statutes:
The Revenue Code
The Customs Act
The Excise Tax Act
Additional offenses as may be designated by the Royal Decree
Exception: Cases falling under the jurisdiction of the Juvenile and Family Court remain excluded from this expanded mandate.
Jurisdictional Guidelines:
Single Act, Multiple Violations: Where a single act violates multiple provisions of tax legislation, the Tax Court shall exercise comprehensive jurisdiction over the entire matter.
Multiple Acts: In cases involving multiple acts where some fall outside the Tax Court’s jurisdiction, the Tax Court possesses discretionary authority to either:
Consolidate and adjudicate all acts collectively; or
Exercise jurisdiction solely over matters within its competence while requiring plaintiffs to pursue separate proceedings in those jurisdictional courts for remaining offenses.
2. Procedural Law Modernization
The amendment introduces significant procedural reforms. Previously, tax cases were governed exclusively by the Civil Procedure Code applied mutatis mutandis. Under the revised framework, the Tax Court may now apply:
The Criminal Procedure Code (mutatis mutandis); and
Procedural rules governing district courts (mutatis mutandis)
This dual procedural framework provides the Tax Court with enhanced flexibility to address the hybrid nature of tax disputes effectively.
3. Court Hearing Notification Protocols
The Act establishes differentiated notification requirements:
General Civil Cases: Parties failing to appear at scheduled hearings bear responsibility for obtaining subsequent hearing dates from the Tax Court. Failure to do so results in constructive notice of future proceedings.
Criminal Cases: The aforementioned rule does not apply, ensuring enhanced due process protections in criminal tax matters.
Implementation Timeline
The Act for the Establishment of and Procedure for the Tax Court (No. 3) B.E. 2568 (2025), will enter into force 180 days after the date of publication in the Royal Gazette (25 May 2025). Importantly, the legislation does not apply retroactively to criminal tax cases already pending in other jurisdictional courts prior to the effective date.
Stakeholder Concerns and Future Considerations
During the legislative drafting process, certain stakeholders raised substantive concerns regarding the fundamental nature of tax dispute resolution. They argued that tax cases are inherently administrative disputes and that the current accusatorial system, adopted due to the Tax Court’s establishment preceding that of the administrative court, creates systemic disadvantages for private litigants contesting state authorities. These stakeholders advocated for adopting an inquisitorial system similar to that employed by the administrative court, arguing that the current framework places an undue evidentiary burden on individuals lacking the resources and access necessary to effectively challenge governmental determinations. While these proposals were not incorporated into the current amendment, given the legislation’s focused objective of ensuring specialized judicial expertise in criminal tax matters, such considerations remain significant and may inform future legislative reforms.
Conclusion
The Act for the Establishment of and Procedure for the Tax Court (No. 3) B.E. 2568 (2025) represents a meaningful evolution in Thailand’s tax dispute resolution framework. By consolidating both civil and criminal tax jurisdiction within a specialized court system, the legislation aims to enhance judicial efficiency and ensure that complex tax matters receive appropriate expert consideration. This reform establishes a foundation for more comprehensive future developments in Thai tax litigation.
On January 13, 2025, the Thai Cabinet approved in principle a draft Royal Decree issued under the Revenue Code, establishing a comprehensive tax incentive framework to promote investment in Special Economic Zones (SEZs). This initiative reduces the Corporate Income Tax (CIT) rate to 10% for qualifying entities engaged in targeted activities within designated SEZ areas. The Royal Decree officially took effect on June 6, 2025, as the “Royal Decree Issued under the Revenue Code on the Reduction of Tax Rates (No. 797), B.E. 2568 (2025).“
Thailand’s commitment to SEZ development is demonstrated through comprehensive support including infrastructure development, investment incentives, streamlined labor management, and integrated one-stop services. Currently, 10 SEZs operate in strategic border locations: Tak, Mukdahan, Sa Kaeo, Songkhla, Trat, Nong Khai, Narathiwat, Chiang Rai, Nakhon Phanom, and Kanchanaburi.
Key Provisions of the Royal Decree
1. Corporate Income Tax Reduction
The Royal Decree establishes a preferential CIT rate of 10% of net profit for companies and juristic partnerships engaged in Board of Investment (BOI)-designated targeted activities. Eligible enterprises must operate within SEZ boundaries, regardless of their headquarters location, and derive income from manufacturing goods or providing services utilized within the SEZs.
This substantial tax incentive applies for 10 consecutive accounting periods, providing long-term investment certainty for businesses planning significant capital commitments in these strategic areas. The accounting period framework is defined as follows:
Standard Timeline: If an accounting period commences on or after the date of business registration with the Revenue Department (RD) for SEZ tax benefits, that period constitutes the first accounting period in the sequence.
Mid-Period Registration: If a business registers for SEZ tax benefits during an ongoing accounting period, that period remains counted as the first, even if its duration is less than twelve months.
2. Establishment Requirements for New Registered Juristic Persons
The Royal Decree establishes distinct requirements based on entity establishment dates:
Post-Effective Date Entities: Companies or juristic partnerships established after June 6, 2025, must maintain business premises within SEZs that consist of permanent structures.
Pre-Existing Entities: For entities registered before June 6, 2025, any premises established within SEZs must comprise permanent buildings and represent either an expansion of or addition to existing facilities.
3. Comprehensive Eligibility Criteria
To qualify for the reduced 10% CIT rate, companies and juristic partnerships must satisfy multiple specific requirements:
Registration Compliance: Entities must register with the RD to claim SEZ tax benefits in accordance with prescribed rules and procedures.
Investment Promotion Act Compatibility: Entities must not simultaneously claim CIT exemption, whether in whole or in part, under the Investment Promotion Act.
Revenue Code Exclusivity: Entities must not claim any alternative CIT reduction provisions under the Revenue Code.
Accounting Segregation: Entities must maintain separate accounting records distinguishing between activities eligible and ineligible for SEZ tax benefits.
Regulatory Adherence: Entities must comply with all criteria, methods, and conditions as announced by the RD.
4. Termination Provisions for Tax Incentive Eligibility
The Royal Decree establishes strict enforcement mechanisms for maintaining eligibility. Should any company or juristic partnership fail to meet eligibility requirements during any accounting period, entitlement to the reduced CIT rate terminates immediately, effective from that specific accounting period.
Strategic Economic Impact
This tax incentive framework is projected to significantly enhance investment flows into SEZs, catalyzing increased industrial activity and employment generation in border regions. The initiative strengthens Thailand’s competitive positioning and reinforces its strategic potential as a regional economic hub within the ASEAN framework.
Conclusion
The implementation of the 10% CIT rate under this Royal Decree represents Thailand’s strategic commitment to attracting substantial investment into SEZs. Through the provision of long-term tax incentives, establishment of clear operational requirements, and enforcement of rigorous eligibility criteria, the government seeks to enhance SEZ competitiveness while promoting sustainable economic development in border areas.
Businesses seeking to capitalize on these incentives must ensure full compliance with all stipulated conditions to maintain their eligibility status. This framework underscores the critical importance of regulatory adherence as a prerequisite for accessing preferential fiscal treatment, establishing a clear value proposition for compliant investors while maintaining the integrity of Thailand’s tax incentive system.
Liquor Production: Empowering Farmers and Small-Scale Entrepreneurs
In June 2025, the Royal Gazette of Thailand published the Excise Tax Act (No. 2) B.E. 2568 (2025), marking a significant reform in the country’s liquor production regulations. Effective June 6, 2025, this legislation amends the Excise Tax Act B.E. 2560 (2017) to facilitate greater access to legal liquor production licenses for farmers, cooperatives, community enterprises, and small-scale entrepreneurs. The act aims to promote economic fairness, support local agriculture, and reduce barriers to entry in the liquor industry while ensuring consumer protection and regulatory compliance.
Background and Purpose:
The Excise Tax Act (No. 2) B.E. 2568 (2025) was enacted to address the restrictive nature of previous regulations, which limited opportunities for small-scale producers to legally enter the liquor market. By revising Section 153 of the Excise Tax Act B.E. 2560 (2017), the new law simplifies the licensing processes and encourages the use of domestic agricultural products in liquor production. This reform aligns with Thailand’s constitutional provisions under Sections 26 and 40, which allow for the restriction of rights and freedoms only to protect consumers and regulate professional activities in a fair and non-discriminatory manner.
The primary objectives of the revised Act are to:
Promote economic inclusivity by enabling small-scale producers, including farmers and community enterprises, to obtain liquor production licenses.
Support the use of local agricultural products in the production of diverse types of liquor, including flavored or colored varieties.
Eliminate unfair economic monopolies and discriminatory practices in the licensing process.
Ensure that regulations do not impose undue burdens on applicants, except where necessary to limit foreign ownership or support state enterprises and small-scale industries.
Key Provisions of the Revised Act:
1. Simplified Licensing Processes (Section 3)
The amended Section 153 of the Excise Tax Act B.E. 2560 (2017) allows individuals or entities wishing to produce liquor or possess distillation equipment to apply for a license from the Director-General of the Excise Department. The application and issuance processes are governed by criteria, methods, and conditions outlined in ministerial regulations. These regulations must prioritize:
Supporting cooperatives, farmer groups, community enterprises, and small-scale entrepreneurs in obtaining licenses for commercial liquor production.
Promoting the use of domestic agricultural products in liquor production.
Ensuring fairness by prohibiting criteria that create economic monopolies, discriminatory practices, or unnecessary burdens, except in cases involving foreign ownership restrictions or state enterprises.
Licenses issued under this section are valid for three years from the date of approval.
2. Transition and Implementation (Section 4)
Existing ministerial regulations, announcements, and rules issued under the Excise Tax Act B.E. 2560 (2017) remain in effect until new regulations are enacted, provided they do not conflict with the amendments. The Ministry of Finance is tasked with issuing updated regulations within 180 days from the revised Act’s effective date (i.e. June 6, 2025).
3. Pending Applications (Section 5)
Applications submitted before the revised Act’s effective date (i.e. June 6, 2025) will be processed under the amended law. If any application does not comply with the new requirements, the Director-General of the Excise Department will notify applicants to make necessary adjustments.
4. Validity of Existing Licenses (Section 6)
Licenses issued under the previous Section 153 remain valid until their expiration, ensuring a smooth transition for current license holders.
5. Oversight and Enforcement (Section 7)
The Minister of Finance is responsible for overseeing the implementation of the revised Act, ensuring compliance with its provisions and objectives.
Implications for Stakeholders:
Farmers and Agricultural Communities
The revised Act empowers farmers and agricultural cooperatives by allowing them to transform local produce into value-added liquor products. This creates new income streams and supports rural economies by leveraging Thailand’s rich agricultural resources.
Small-Scale Entrepreneurs
By removing discriminatory barriers and simplifying the licensing process, the act enables small-scale entrepreneurs to enter the liquor market legally. This fosters innovation, encourages the production of unique and artisanal liquors, and promotes competition in an industry previously dominated by larger players.
Consumers
The Revised Act’s emphasis on consumer protection ensures that all liquor produced under the new licensing framework meets safety and quality standards. Consumers may also benefit from a wider variety of locally produced liquors, potentially at more competitive prices.
Government and Regulatory Bodies
The Excise Department is tasked with developing clear and fair regulations within the 180-day timeframe. This includes establishing standards for liquor production and ensuring that the licensing process is accessible and transparent.
Challenges and Considerations:
While the act is a significant step toward economic inclusivity, its success depends on the timely issuance of clear ministerial regulations. The 180-day deadline for updating rules is critical to avoid delays in implementation. Additionally, the Excise Department must balance consumer safety with the need to minimize bureaucratic hurdles for small-scale producers. Monitoring foreign ownership and ensuring compliance with production standards will also be key to maintaining fairness and protecting local interests.
Conclusion:
The Excise Tax Act (No. 2) B.E. 2568 (2025) represents a transformative shift in Thailand’s liquor industry, unlocking opportunities for farmers, cooperatives, and small-scale entrepreneurs. By promoting the use of domestic agricultural products and eliminating unfair barriers, the act fosters economic growth, innovation, and inclusivity. As Thailand moves toward a more equitable and vibrant liquor market, the effective implementation of this legislation will be crucial to realizing its full potential.
Key Takeaways:
Transition Period: Existing licenses remain valid, and pending applications will be processed under the revised Act and its regulations, with adjustments as needed.
Effective Date: The Excise Tax Act (No. 2) B.E. 2568 (2025) takes effect on June 6, 2025, with new regulations to be issued within 180 days.
Simplified Licensing: The amended Section 153 facilitates access to liquor production licenses for farmers, cooperatives, and small-scale entrepreneurs.
Support for Local Agriculture: The revised Act encourages the use of domestic agricultural products in liquor production and boosting rural economies.
Fairness and Transparency: Licensing criteria must avoid discriminatory practices, monopolies, or excessive burdens, except for foreign ownership restrictions.
Consumer Protection: The revised Act ensures that all licensed liquor production meets safety and quality standards.
New Tax Framework for Foreign-Sourced Income: Thailand’s Draft Decree Explained
The taxation of foreign-sourced income has emerged as a pivotal issue within Thailand’s tax system, particularly as increasing numbers of Thai individuals engage in overseas employment, investment, and asset holdings. The government seeks to achieve a delicate balance between closing tax loopholes and incentivizing the repatriation of overseas funds to stimulate domestic economic growth.
Historical Framework
Under the previous Revenue Department Order No. GorKhor 0802/696, dated 1 May 1987, foreign-sourced income remained exempt from Thai personal income tax provided it was brought into Thailand in a tax year different from the year in which it was earned. This provision enabled many individuals to legally defer the remittance of foreign income, thereby avoiding immediate taxation obligations.
Current Regulatory Changes
Effective 1 January 2024, the aforementioned provision was repealed by Revenue Department Order No. Por.161/2566. Under this regulation, individuals classified as Thai tax residents, those residing in Thailand for more than 180 days within a calendar year, are now obligated to pay personal income tax on foreign-sourced income if such income is remitted to Thailand, regardless of the calendar year it is earned. The applicable personal income tax rates for this remitted foreign income range progressively from 5% to 35%, determined by the total taxable amount.
Unintended Consequences and Policy Response
While Revenue Department Order No. Por.161/2566 was enacted to enhance tax transparency and align Thailand’s tax framework with international standards, including those established by the OECD, it has generated an unintended consequence. Many Thai individuals earning foreign-sourced income have opted not to remit such funds to Thailand due to concerns regarding potentially substantial tax burdens.
In response to these matters, the Revenue Department is currently drafting a new Royal Decree (hereinafter referred to as “the Draft“) designed to address these conditions.
Key Proposed Provisions
The Draft includes the following principal proposals:
Tax Exemption Extension: Personal income tax exemption will apply to foreign-sourced income remitted to Thailand within one to two years from the year it was earned. If remitted after that, the income tax will be applied.
Elimination of Same-Year Requirement: The current requirement mandating income remittance within the same calendar year it was earned will be removed.
This revised approach aims to provide taxpayers with enhanced flexibility in managing financial transactions, such as year-end dividend payments, while serving as a positive incentive for overseas Thais to repatriate funds for domestic investment across capital markets, business enterprises, and real estate sectors.
Current Status and Implementation Considerations
While the Draft represents a promising policy development, it has not yet been formally enacted and enforced. Uncertainty remains regarding whether the new provisions will apply retroactively to income remitted to Thailand during 2024.
Until formal enactment occurs, timing remains a critical consideration. Remitting income outside the anticipated grace period may result in taxation under current regulations.
Conclusion
The recent policy initiative by the Thai government reflects a broader strategic objective to incentivize, rather than penalize, the repatriation of foreign-sourced income. This approach serves dual purposes—reducing the tax burden on individuals earning income abroad while acting as a catalyst for attracting capital back into the domestic economy. Should the Draft be formally enacted and enforced, it will communicate a clear and positive message to overseas Thai nationals that repatriating funds will no longer entail prohibitive tax costs.
The success of this policy framework will ultimately depend on its implementation details and the government’s ability to balance revenue generation with economic stimulus objectives.
Alcohol production in Thailand is a vital part of the economy, deeply rooted in local culture, traditional knowledge, and agriculture. The Liquor Act B.E. 2493 (1950) has long governed the sector with stringent licensing requirements, such as minimum machinery size, employee numbers, and capital investment. These rules have favored large corporations, creating significant barriers for small-scale producers and stifling competition and innovation.
To address these challenges, the Thai government introduced the Ministerial Regulation on the Production of Liquor B.E. 2565 (2022), which aimed to simplify licensing and support small and medium enterprises (SMEs) and community-based producers. Building on this, the Draft Ministerial Regulation on the Production of Liquor (No. ..), B.E. …. (the “DraftMinisterial Regulation“), approved by the Thai Cabinet on May 13, 2025, further advances these reforms by promoting inclusivity and sustainability in the liquor industry.
Recent Developments in the Draft Ministerial Regulation:
The Draft Ministerial Regulation, proposed by the Ministry of Finance, underwent public consultation from December 25, 2024, to January 9, 2025, via the Excise Department’s website and Thailand’s central legal portal. It seeks to balance high production standards with increased support for local enterprises, including agricultural cooperatives and small-scale producers. The regulation aims to foster fair competition, integrate local wisdom, and promote Thailand’s soft power through cultural and creative industries while aligning with the ease of doing business policy.
Key Amendments in the Draft Ministerial Regulation:
Relaxed Location Restrictions for Distilleries Previously, small and medium scale distilleries were required to be located at least 100 meters from public water sources. The Draft Ministerial Regulation allows distilleries to operate closer if they install wastewater treatment systems meeting Excise Department environmental standards, reducing barriers for small producers.
Elimination of the One-Year Progression Requirement Medium-scale producers no longer need to operate as small-scale facilities for one year before applying for a production license. This streamlines the licensing process, making it easier for new entrants to join the market.
Support for Craft Beer and Fresh Beer Markets Breweries producing fresh beer can now distribute their products off-site in designated containers like kegs, creating new opportunities for Thailand’s growing craft beer industry.
Updated Terminology for Clarity The term “industrial fermented liquor facility for on-site beer sales” has been replaced with “fresh beer industrial facility” to better align with modern craft beer business practices, improving regulatory clarity.
Alignment with Broader Reforms:
The Ministerial Regulation on the Production of Liquor B.E. 2565 (2022) laid the groundwork for liberalizing the liquor industry, but small producers still faced challenges. The Draft Ministerial Regulation builds on this by further easing restrictions and complements proposed legislative reforms, such as the Draft Progressive Liquor Law, the Draft United Thai Liquor Law, and the Draft Community Liquor Law. Together, these initiatives aim to create a more open, competitive, and diverse liquor industry.
Conclusion:
The Draft Ministerial Regulation marks a pivotal step toward revitalizing Thailand’s liquor industry by empowering small-scale and community-based producers. By reducing regulatory hurdles and promoting local entrepreneurship, it fosters innovation and cultural preservation while enhancing economic opportunities. Stakeholders, including small producers and entrepreneurs, should monitor the Draft Ministerial Regulation’s finalization and implementation to ensure compliance and seize emerging opportunities.
Online Gaming Act: Push for a Balanced and Thriving Digital Economy
Thailand’s Ministry of Digital Economy and Society (MDES) is taking significant steps to regulate and promote the online gaming industry through the draft Film and Game Act (Draft Act). This legislative effort aims to balance the rapid growth of the gaming industry with the need to protect society, particularly children and youth, from potential negative impacts. The Draft Act seeks to establish a comprehensive framework for the industry, focusing on content regulation, industry promotion, and consumer protection.
Key Provisions of the Draft Act:
1. Content Regulation and Age-Appropriate Classification
The Draft Act introduces a content rating system for films and games, ensuring that media content is appropriate for different age groups. This system will help parents and guardians make informed decisions about what their children consume. Games and films must display their content ratings, brief descriptions, and identification codes to inform consumers about their suitability.
The content rating system will categorize games and films based on their themes, such as violence, sexual content, or language. For example, games with violent content may be restricted to players aged 18 and above, while games with educational content may be suitable for all ages. This system will be enforced by the Content Classification Committee, which will review and classify media content before it is released to the public. Developers and publishers must ensure their products comply with these classifications and display the appropriate labels prominently.
2. Establishment of Regulatory Bodies
The Draft Act proposes the creation of a National Film and Game Industry Promotion Committee, chaired by the Prime Minister, to oversee the industry. This committee will include representatives from various ministries, experts in media, psychology, culture, and marketing, as well as stakeholders from the gaming and film industries. Additionally, a Content Classification Committee will be established to review and classify media content.
The National Film and Game Industry Promotion Committee will be responsible for setting policies, promoting the industry, and ensuring compliance with the law. It will also work to attract international investments and foster innovation in the gaming sector. The Content Classification Committee, on the other hand, will focus on reviewing and classifying media content to ensure it meets the standards set by the law. These bodies will play a crucial role in shaping the future of Thailand’s gaming and film industries.
3. Streamlined Licensing and Registration
The Draft Act simplifies the licensing process for gaming and film businesses, replacing the previous stringent approval system with a notification-based system. This change aims to reduce bureaucratic hurdles while maintaining standards to protect consumers and public interests.
Under the new system, businesses will only need to notify the relevant authorities of their operations, rather than obtaining prior approval. This streamlined process will make it easier for startups and small businesses to enter the market. However, businesses must still adhere to the standards set by the law, such as content classification and consumer protection measures. The authorities will conduct periodic inspections to ensure compliance.
4. Promotion of Local Industry and Talent
The draft law emphasizes the development of Thailand’s gaming and film industries by promoting local talent, encouraging innovation, and attracting international investments. It also aims to create a fund to support the growth of these industries, ensuring they remain competitive on a global scale.
The government plans to establish a fund to provide financial support to local game developers, filmmakers, and other stakeholders. This fund will be used to finance innovative projects, provide training and development programs, and support international collaborations. Additionally, the government will work with educational institutions to develop curricula that align with the needs of the gaming and film industries, ensuring a steady pipeline of skilled talent.
5. Protection of Youth and Society
The Draft Act prioritizes the protection of children and youth from harmful content. It mandates that games and films with inappropriate content, such as violence, explicit material, or content that undermines national security or morality, must be restricted or banned. The law also empowers authorities to take action against media that violates these standards.
The law includes strict provisions to prevent the dissemination of harmful content to minors. For example, games with violent or explicit content must be clearly labeled and restricted to appropriate age groups. The authorities will have the power to take down or block access to games and films that violate these standards. Additionally, the law encourages the development of parental control features in games to help parents monitor and restrict their children’s access to inappropriate content.
6. Penalties for Non-Compliance
The Draft Act introduces administrative fines and criminal penalties for businesses that fail to comply with content classification, licensing, or other regulatory requirements. Penalties can range from fines of up to 5 million baht to imprisonment, depending on the severity of the violation.
Businesses that fail to comply with the law may face significant penalties. For example, a company that releases a game without the required content classification could be fined up to 5 million baht. In severe cases, such as the dissemination of content that undermines national security or morality, the responsible individuals could face imprisonment. These penalties are designed to ensure that businesses take their regulatory obligations seriously and prioritize consumer protection.
What the Online Gaming Industry Needs to Prepare For:
1. Compliance with Content Classification
Game developers and publishers must ensure their products are reviewed and classified according to the new content rating system. This includes displaying appropriate labels and ensuring that games are marketed responsibly to the right age groups.
Developers will need to submit their games to the Content Classification Committee for review before release. The committee will assess the game’s content and assign an appropriate rating. Developers must then display this rating prominently on the game’s packaging, marketing materials, and digital storefronts. Failure to comply with these requirements could result in fines or other penalties.
2. Adaptation to New Licensing Requirements
Businesses in the gaming industry will need to familiarize themselves with the new notification-based licensing system. This includes registering their operations and adhering to the standards set by the regulatory bodies.
The new licensing system will require businesses to notify the authorities of their operations and provide details about their products and services. While this process is less burdensome than the previous approval system, businesses must still ensure they meet all regulatory requirements. This includes adhering to content classification standards, protecting consumer data, and ensuring fair business practices.
3. Focus on Youth Protection
The industry must prioritize creating content that is suitable for younger audiences or clearly labeling games that are intended for mature players. Developers should also consider implementing parental controls and other safeguards to protect minors.
Developers should design games with youth protection in mind, ensuring that content is appropriate for the intended age group. For games aimed at mature audiences, developers must implement robust age verification systems and parental controls. Additionally, developers should avoid using manipulative design practices, such as excessive in-game purchases, that could exploit younger players.
4. Investment in Local Talent and Innovation
With the government’s focus on promoting the local gaming industry, businesses should invest in developing Thai talent and creating innovative games that can compete globally. Collaboration with educational institutions and participation in government-led initiatives will be key.
Businesses should partner with universities and vocational schools to develop training programs that equip students with the skills needed in the gaming industry. Additionally, companies should invest in research and development to create innovative games that appeal to both domestic and international audiences. Participation in government-led initiatives, such as industry forums and innovation grants, can also help businesses stay ahead of the curve.
5. Preparedness for Regulatory Inspections
Gaming companies should be prepared for inspections by regulatory authorities to ensure compliance with the new law. This includes maintaining proper records, adhering to content guidelines, and cooperating with authorities during investigations.
Companies should establish internal compliance teams to ensure they meet all regulatory requirements. This includes maintaining detailed records of their operations, content classifications, and consumer complaints. Regular internal audits can help identify and address potential compliance issues before they are flagged by authorities.
6. Engagement with Regulatory Bodies
The industry should actively engage with the newly established regulatory bodies to provide feedback and stay informed about any updates or changes to the law. Participation in public consultations and industry forums will be crucial.
Businesses should participate in public consultations and industry forums to share their perspectives and provide feedback on the Draft Act. This engagement will help ensure that the final regulations are practical and effective. Additionally, businesses should establish regular communication channels with regulatory bodies to stay informed about any updates or changes to the law.
Conclusion:
Thailand’s Draft Act represents a significant step toward regulating and promoting the online gaming industry while safeguarding societal interests. By balancing growth with responsibility, the law aims to create a thriving digital economy that benefits both businesses and consumers. For the gaming industry, this means adapting to new regulations, prioritizing youth protection, and seizing opportunities for growth and innovation. As the Draft Act moves closer to implementation, stakeholders must prepare to navigate this evolving landscape and contribute to the sustainable development of Thailand’s gaming sector.
