Thailand Promotes Electric Vehicle (EV) by Reducing Excise Tax

On 12 May 2022, the Cabinet of Thailand has approved in principle a draft Royal Decree Reduction of  Yearly Excise Tax Rate for Completely Built Electric Vehicles B.E. …. (“Draft Royal Decree”)  as proposed by the Ministry of Transport . The Draft Royal Decree will be reviewed by the Office of the Council of State with consultation of the   Office of the National Economic and Social Development Council. Afterwards, the Ministry of Transport and other related ministries shall take suggestion from the Ministry of Transport, Ministry of Industry and Office of the National Economic and Social Development Council into consideration.

The tax measure in reducing the excise tax rate under Motor Vehicle Act B.E. 2522(1979) to  80% is applied for completely built EV cars registered between 1 October 2022 to 30 September 2025 for 1 year since their registration date. The incentives vary depended on the types and models of vehicle as follows:

Please note that the yearly excise tax rate for completely built electric vehicles for item nos. 2-8 will be reducing for 50% of the rates as specified in the Motor Vehicle Act B.E. 2522(1979).

Tax Relief Measures for Digital Asset Trading

The Cabinet, on 8 March 2022, has approved in principle drafts Royal Decree under the Revenue Code regarding VAT exemption (No. ..) B.E. …. (“Royal Decree”) and Ministerial Regulation (No. ..) B.E. …. (“Ministerial Regulation”) issued under the Revenue Code regarding VAT and income tax exemption as proposed by the Ministry of Finance.

close up shot of two people holding a gold coin

These drafts Royal Decree and Ministerial Regulations are measures to relieve the tax burden for people in trading digital assets by exempting VAT for transferring of cryptocurrencies or digital tokens in digital asset exchanges and transferring of digital currencies issued by the Bank of Thailand (“BOT”) as well as exempting personal income tax from the benefit of transferring of cryptocurrencies or digital tokens from the profits earned.

The main points of these Royal Decrees and Ministerial Regulation are as follows:

  • The drafts Royal Decree is applied for VAT exemption for transferring of cryptocurrencies or digital tokens in digital asset exchanges approved by the Minister of Finance and VAT exemption for transferring of digital currencies under the development and trial program for public sector usage issued by the BOT, starting from the 1st date of the next month that the Cabinet has granted its approval until 31 December 2023.
person holding gold and silver round coins in clear glass jar
  • The draft Ministerial Regulation is applied for personal income tax exemption on profits obtained from transferring of cryptocurrencies or digital tokens in digital asset exchanges approved by the Minister of Finance in the amount equal to losses in the same fiscal year (the other words, profits – losses = amount of income for tax calculation), starting  from 14 May 2018 onwards, in which rules, procedures and conditions announced by the Director-General of the Revenue Department will be applied.

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:

antique bills business cash
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.

On 7 December 2021, the Cabinet has approved to remain the rate of land and building taxation and the draft Royal Decree Stipulating the Rate of Land and Building Tax B.E. …. (“Draft Royal Decree”) as proposed by the Ministry of Finance and reviewed by the Council of State.

The Ministry of Finance considered and has approved to remain the rate of land and building taxas specified in the transitory provision, i.e., Section 94 of Land and Buildings Tax Act B.E. 2562 for the collection of land and building tax from 2022 onwards under the following reasons:

calculators on the table
  • Most taxpayers, under hearings arranged by the Fiscal Policy Office of the Ministry of Finance, agreed with the current land and building taxation e.g., basis tax calculated by assessed value, different rates of tax depending on the types of utilization, and tax burden of the taxpayers are reduced or remains the same as compared with the tax burden by house and land tax or land development tax.
  • Progressive tax rates are fair and appropriate to the current situation. This makes people with higher land or building values have a greater tax burden than those with lower land or building values. It also does not create an unreasonable tax burden.
  • Due to mitigation of  impact of covid-19 epidemic, the Royal Decree on Land and Certain Types of Land Tax Reduction B.E. 2563 and The Royal Decree on Land and Certain Types of Land Tax Reduction (No.2) B.E. 2564 have reduced the amount of tax at a rate of 90% of the amount of tax calculation, in which the taxpayer has not yet been aware of the full real tax burden. Therefore, the same tax rate should be remained for a while.
  • Due to changing of tax administration and procedure, the Department of Local Administration does not have the database of land and building tax of each taxpayer that can be efficiently processed the  taxes Collection.

The rates of land and building tax under the Draft Royal Decree are as follows:

Types of utilizationTax rates in percentage according to the value of land and/or building
(1) Land and building used for agricultural purpose0.01 – 0.1
(2) Land and building used for residential purpose0.02 – 0.1
(3) Land and building used otherwise than in (1) or (2)0.3 – 0.7
(4) Land and building left empty or unused as otherwise reasonable for its condition0.3 – 0.7