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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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Thailand’s New Import Duty Framework for Low-Value Goods: A Policy Shift Toward Competitive Neutrality

On 4 December 2025, the Thai Customs Department issued Customs Notification No. 219/2568 (2025), introducing significant reforms to Thailand’s import duty regime for low-value goods (LVGs). This measure eliminates the long-standing import duty exemption for LVGs as part of a broader policy initiative to address competitive imbalances between imported and domestically supplied goods and to restore tax neutrality in the Thai market. The Notification took effect on 1 January 2026 and remains in force until superseded by subsequent regulation.

Legal Background: Evolution of Import Duty Rules for LVGs

Historically, LVGs were exempt from import duty under Customs Notification No. 191/2561 (2018), which granted duty-free treatment for imported goods with a customs value not exceeding THB 1,500. This exemption was originally designed to reduce administrative burdens associated with customs clearance of small-value shipments.

However, the rapid expansion of cross-border e-commerce has resulted in LVGs being imported into Thailand on a substantial commercial scale, often in direct competition with domestically supplied goods. Over time, the exemption increasingly deviated from its original administrative rationale and raised concerns regarding fair competition and unequal tax treatment.

This measure was expressly temporary and applied only until 31 December 2024, after which the exemption regime reverted to the framework established under Notification No. 191/2561 (2018).

To establish a more sustainable policy framework, the Customs Department subsequently issued Customs Notification No. 219/2568 (2025), which formally repealed Customs Notification No. 191/2561 (2018). Consequently, the previous import duty exemption for LVGs has been fully revoked and is no longer in effect.

Current Import Duty Framework for LVGs

Under Customs Notification No. 219/2568 (2025), the following provisions now apply:

  • Imported goods with a customs value of less than THB 1 remain exempt from import duty.
  • Imported goods with a customs value of THB 1 or more are subject to import duty in accordance with the applicable tariff classification under Thailand’s customs tariff schedule.

Anticipated Benefits

  • Enhanced competitive equity: Domestic businesses, particularly small and medium-sized enterprises (SMEs), benefit from more equitable market conditions, as imported goods are now subject to import duty treatment comparable to locally supplied goods.
  • Improved tax neutrality: The revised framework reduces disparities in tax treatment between imported and domestically supplied goods, promoting a more level playing field.
  • Strengthened customs enforcement: These changes enhance customs oversight of large-scale commercial imports previously classified as low-value shipments, improving revenue collection and trade compliance.

Potential Challenges

  • Increased costs for cross-border sellers and consumers: Goods previously imported duty-free may now incur import duties, resulting in higher overall costs for end consumers and cross-border merchants.
  • Enhanced compliance obligations: Overseas sellers and e-commerce platforms face additional customs formalities and documentation requirements, potentially increasing operational complexity.
  • Administrative burden: The shift may require significant adjustments to existing logistics and compliance infrastructure.
  • Practical and Operational Implications
  • Pricing adjustments: Importers, logistics providers, and e-commerce platforms should revise their pricing structures to reflect increased exposure to import duties and maintain competitive positioning.
  • Process and system updates: Customs declarations, tariff classifications, and internal compliance systems require comprehensive review and updates to ensure alignment with the new regulatory framework.
  • Transitional considerations: Market participants may experience temporary operational adjustments and should implement appropriate change management procedures to facilitate smooth adaptation to the new regime.

Future Policy Considerations

In addition to the revised import duty framework, the Customs Department has indicated interest in simplifying the import duty structure for LVGs through the application of a single, uniform duty rate rather than multiple rates determined by product tariff classification. From a policy perspective, preliminary discussions suggest that collecting import duties on LVGs at an average rate of approximately 10% may be insufficient to achieve meaningful competitive balance. A higher rate—potentially in the range of 30%—has been discussed as more likely to establish parity between domestic and foreign businesses.

However, under the current caretaker government, the Customs Department lacks the authority to issue emergency decrees to amend the customs tariff schedule. Consequently, any modifications to duty rates or tariff structures will require legislative action following the formation of a new government.

Conclusion

The new import duty framework for low-value goods represents Thailand’s strategic policy response to the rapid growth of cross-border e-commerce and reflects a clear commitment to competitive fairness and tax neutrality. While these changes may result in increased costs and compliance obligations for certain overseas sellers and importers, they also strengthen customs enforcement capabilities and create more equitable conditions for domestic businesses.

Businesses engaged in importing goods into Thailand should conduct comprehensive reviews of their pricing strategies, customs classifications, and logistics and compliance processes to ensure ongoing adherence to the new regulatory framework. Early preparation and proactive adaptation will be essential to maintaining operational efficiency and market competitiveness under the revised regime.

Author: Panisa Suwanmatajarn, Managing Partner.

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Thailand Issues Key Top-Up Tax Guidance: Exchange Rates, Exempt Entities, and Special Cases

Thailand enacted the Emergency Decree on Top-Up Tax B.E. 2567 (2024) (the “Emergency Decree“), which applies to large multinational enterprises (MNEs) whose total consolidated revenue, as reported in the consolidated financial statements of the ultimate parent entity (UPE), equals or exceeds EUR 750 million (or the Thai Baht equivalent). This legislation subjects in-scope MNEs to a top-up tax at a 15% global minimum tax rate for accounting periods commencing on or after 1 January B.E. 2568 (2025).

To support the implementation of the Emergency Decree with clarity and ensure practical enforceability, the Director-General of the Revenue Department issued three items of secondary legislation (the “Notifications“). These Notifications were issued on 24 December B.E. 2568 (2025) and published in the Royal Gazette on 13 January B.E. 2569 (2026). The Notifications apply for purposes of determining top-up tax liability for accounting periods commencing on or after 1 January B.E. 2568 (2025).

Key Provisions of the Secondary Legislation

1. Notification of the Director-General of the Revenue Department on Top-Up Tax (No. 6): Exchange Rate Conversion Standards

The top-up tax calculation is based on the financial information of MNE groups, which generally conduct operations using foreign currencies as their principal currencies. Consequently, establishing clear and standardized exchange rate rules is essential for accurate top-up tax computation.

This Notification prescribes exchange rate criteria for converting foreign currency amounts into Thai Baht under the Emergency Decree, ensuring consistency and uniformity in top-up tax calculations. The key provisions include:

Conversion for Tax Calculation Purposes

When the law prescribes criteria or conditions requiring consideration of figures from financial statements or calculation of top-up tax for an entity or group of entities stated in foreign currency, and such amounts must be converted to Thai Baht for a particular accounting period, the conversion shall utilize the average rate between the buying rate and selling rate for the month of December preceding that accounting period, as calculated by the Bank of Thailand.

Payment and Refund of Top-Up Tax

Regardless of which foreign currency is used as the principal currency in the operations of an entity or its group entities, any payment or refund of top-up tax in Thailand shall be made exclusively in Thai Baht. The conversion shall be calculated using the average rate between the buying rate and selling rate of commercial banks, as calculated by the Bank of Thailand on the last business day preceding either the date of tax payment or the date on which the competent authority approves the tax refund, unless otherwise exempted.

2. Notification of the Director-General of the Revenue Department on Top-Up Tax (No. 7): Excluded Entity Characteristics

Pursuant to Section 26 of the Emergency Decree, constituent entities (CEs) located in Thailand that are members of an MNE group whose total consolidated revenue, as reported in the consolidated financial statements of the UPE, equals or exceeds EUR 750 million (or the Thai Baht equivalent) for at least two accounting periods within the four accounting periods prior to the current accounting period, are subject to top-up tax.

However, Section 27 provides that certain categories of CEs are exempt from being treated as CEs subject to top-up tax. These exemptions apply to:

  1. Government agencies
  2. International organizations
  3. Non-profit organizations
  4. Pension funds
  5. Investment funds that are UPEs
  6. Real estate investment vehicles that are UPEs
  7. Other entities as may be prescribed by Royal Decree

To prevent overly broad interpretation of these exemptions, this Notification clearly and specifically prescribes the characteristics and qualifications of each entity type that does not constitute a CE, thereby establishing which entities fall outside the scope of top-up tax liability.

3. Notification of the Director-General of the Revenue Department on Top-Up Tax (No. 8): Special Calculation Rules for Entities with Specific Characteristics

This Notification prescribes specific criteria, procedures, and conditions for determining top-up tax liability applicable to CEs with the following characteristics:

  1. Constituent entities in which the UPE holds a minority interest
  2. Stateless constituent entities
  3. Investment entities, including insurance investment entities with liabilities arising from insurance contracts or life insurance annuity contracts

These entities possess legal forms, organizational structures, complex ownership structures, or operational modes that are distinct from other CEs, rendering the general rules under the Emergency Decree inappropriate for direct application. Accordingly, this Notification clearly prescribes specific methodologies and conditions for determining:

  • The scope of income
  • The aggregation of income
  • The allocation of profits or losses
  • Calculation methodologies

These provisions ensure that top-up tax collection is conducted accurately and fairly, properly reflecting the effective tax rate (ETR).

Separate Calculation Requirement

The calculation of ETR and top-up tax for CEs with these specific characteristics shall be conducted separately from other CEs within the MNE group. Furthermore, in certain cases, items and amounts included in the computation of ETR and top-up tax for entities with specific characteristics shall not be included in the computation of ETR and top-up tax for other CEs within the MNE group.

Legal Status and Hierarchy

These Notifications are issued pursuant to the authority granted under the Emergency Decree. They establish criteria and procedures for practical enforcement and support the implementation of the Emergency Decree. The Notifications apply consistently with the Emergency Decree, provided they do not conflict with other existing or future secondary legislation, such as Royal Decrees or Ministerial Regulations, which may be issued to prescribe further details in accordance with standards established by the Organization for Economic Co-operation and Development (OECD). Accordingly, stakeholders must continuously monitor further developments.

Key Considerations for Stakeholders

1. Application of Prescribed Exchange Rates

MNEs subject to top-up tax must apply the exchange rates prescribed under the relevant Notification when converting foreign currency amounts into Thai Baht to ensure uniform standards for tax computation. The amount of tax payable may vary based on prescribed exchange rates. However, such enterprises are afforded sufficient time to ascertain applicable criteria in advance of the accounting period commencement.

2. Documentation Requirements for Specific Constituent Entities

Constituent entities in which the UPE holds a minority interest, entities with complex ownership structures, stateless constituent entities, and investment entities whose ETR may not accurately reflect actual tax burdens must prepare comprehensive and detailed supporting documentation. Such information should include, but is not limited to:

  • Investment income details
  • Ownership and control structures
  • Asset management arrangements
  • Relevant financial statements

This documentation should support the assessment of whether top-up tax computation should be performed according to general rules or whether the application of specific rules, methodologies, or conditions prescribed by the relevant Notification is required.

Conclusion

The Emergency Decree has been designed to align with the OECD Global Anti-Base Erosion Rules. These Notifications are essential to demonstrate Thailand’s commitment to implementing top-up tax in accordance with OECD-prescribed standards while safeguarding Thailand’s rights and interests in top-up tax collection. Therefore, these Notifications should be considered and applied in conjunction with the Emergency Decree to enable CEs subject to top-up tax to calculate their obligations accurately and minimize interpretative gaps that could otherwise be exploited to avoid top-up tax liability.

Author: Panisa Suwanmatajarn, Managing Partner.

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Thailand’s Proposed VAT Increase: Legal and Policy Overview

Thailand is currently undertaking a comprehensive review of its long-term fiscal policy in response to rising public expenditure, persistent budget deficits, and the imperative to secure sustainable government revenue. For fiscal year B.E. 2569 (2026), the Ministry of Finance is preparing a broader tax structure reform plan to be submitted to the incoming government. A key element under consideration is a potential adjustment to the Value Added Tax (VAT) rate.

Background of Thailand’s VAT System

Thailand’s current VAT framework originated as an economic relief measure. In B.E. 2542 (1999), the government issued the Royal Decree Issued under the Revenue Code on the Reduction of the Value Added Tax Rate (No. 353) B.E. 2542 (1999), reducing the VAT rate from the statutory rate of 10% to 7% (comprising 6.3% VAT and 0.7% local tax). This measure was introduced during the Asian financial crisis, commonly referred to in Thailand as the “Tom Yum Kung” crisis.

Although originally intended as a temporary measure, the reduced VAT rate of 7% has been continuously extended through successive Royal Decrees for more than two decades and has remained a core feature of Thailand’s VAT system.

In recent years, the Ministry of Finance has expressed concern that the continued application of the reduced VAT rate may prove inadequate to meet Thailand’s future fiscal obligations, including expenditures related to infrastructure development, social welfare programs, and public debt servicing. Additionally, Thailand’s VAT rate remains comparatively low relative to those of many other jurisdictions.

The Ministry of Finance’s Proposed VAT Plan

Based on current policy discussions, the Ministry of Finance is considering a phased adjustment of the VAT rate rather than an immediate increase. The indicative timeline under consideration includes:

  • An increase in the VAT rate from 7% to 8.5% by 2028; and
  • A further increase to 10% by 2030.

Support Measures for Vulnerable Groups

To mitigate the potential social impact of a VAT increase, the Ministry of Finance has indicated that a portion of the additional revenue would be allocated to support vulnerable groups and alleviate cost-of-living pressures. By way of illustration, if VAT revenue were to increase by THB 100 billion, approximately THB 20 billion could be allocated to supplementary benefits under the State Welfare Card scheme, with the remaining amount applied to other cost-of-living support measures. These initiatives are intended to cushion the impact on low-income households in the event that a VAT adjustment is implemented.

Impacted Stakeholders and Economic Sectors

Any adjustment to Thailand’s VAT rate would have wide-ranging implications across multiple stakeholder groups and economic sectors.

Consumers – VAT is a consumption tax that is generally passed on to end consumers through higher prices for goods and services. Households, particularly low-income and fixed-income groups, are likely to experience the immediate impact through increased living costs. While certain essential goods and services may be zero-rated or exempt, they could still be indirectly affected through higher input costs.

Businesses and Operators – VAT-registered businesses would face higher output VAT obligations, which may affect pricing strategies, cash flow management, and compliance costs. Small and medium-sized enterprises (SMEs), in particular, may experience greater pressure if competitive constraints prevent them from fully passing on increased VAT to customers. Certain sectors, such as retail, hospitality, logistics, and consumer services, are expected to be more sensitive to VAT changes due to price elasticity and consumer behavior.

Government and Public Finance – For the government, a VAT increase would strengthen revenue collection and reduce reliance on borrowing. According to policy discussions led by the Ministry of Finance, any adjustment would be accompanied by targeted support measures for vulnerable groups to mitigate social impacts and maintain economic stability.

Current Status

At present, no legislative amendment or binding decision has been enacted. The VAT rate remains at 7% under the Royal Decree Issued under the Revenue Code on the Reduction of the Value Added Tax Rate (No. 799) B.E. 2568 (2025), which extends the reduced VAT rate until 30 September B.E. 2569 (2026). Any adjustment to the VAT rate will be conditional upon prevailing economic conditions. Accordingly, all impacted stakeholders and economic sectors should closely monitor ongoing developments to ensure timely awareness and compliance with any changes.

Conclusion

Thailand’s potential VAT reform reflects broader efforts to strengthen fiscal sustainability and secure long-term public revenue. While the reduced VAT rate remains in force and no legislative amendment has yet been enacted, policy discussions indicate a possible phased increase over the medium to long term. Any adjustment will depend on economic conditions and is likely to be implemented alongside mitigating measures to address social and economic impacts. In this context, businesses, taxpayers, and other affected sectors should closely monitor regulatory developments and assess potential implications for pricing, compliance obligations, and overall cost structures should the proposed reform proceed.

Author: Panisa Suwanmatajarn, Managing Partner.

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Updated Regulation on Official Secrets: Modernization, Electronic Security Measures, and Comparison with International Standards

On 30 December 2025, the Thai Cabinet approved in principle the draft Regulation on the Protection of Official Secrets (No. ..) B.E. …., as proposed by the Office of the Permanent Secretary to the Prime Minister. This revision updates the framework established in B.E. 2544 (2001), primarily to address the increasing reliance on electronic systems in government operations and resolve limitations in handling classified information digitally.

Background and Rationale:

The original regulation, enacted pursuant to Section 16 of the Official Information Act, B.E. 2540 (1997), mandated measures to prevent leakage of official secrets. It detailed procedures for classification, copying, translation, transfer, transmission, disclosure, destruction, storage, backup, and security, but focused predominantly on paper-based documents.

With the widespread adoption of electronic systems, agencies faced operational delays when handling classified information, often reverting to paper methods for compliance. This practice conflicted with the Prime Minister’s Office Regulation on Administrative Correspondence (No. 4), B.E. 2564 (2021), which promotes electronic administration.

The need for reform was identified as early as the Official Information Board No. 2/2554 meeting in March 2011, leading to the formation of a sub-committee. The revised draft, endorsed by the Board in its no. 2/2568 meeting on 28 October 2025, was subsequently submitted to the Cabinet.

Key Amendments: Electronic Classified Information

The primary enhancement is the introduction of Chapter 5: Electronic Classified Information, comprising 26 new provisions (Sections 50/1 to 50/26). These establish comprehensive guidelines for digital management of classified data, covering:

•  Classification and marking of electronic documents.

•  Procedures for creation, copying, translation, transfer, transmission, receipt, and disclosure via digital channels.

•  Secure storage, backup, and recovery to mitigate loss or unauthorised destruction.

•  Cybersecurity measures, including encryption, access controls, and system auditing.

•  Protocols for secure destruction of electronic classified information when no longer needed.

These provisions aim to facilitate efficient inter-agency coordination and public service delivery while preserving confidentiality.

Expected Benefits:

By providing clear protocols for electronic transmission, the regulation enhances administrative speed and aligns secrecy practices with modern information technology. It supports digital transformation in public administration without compromising national security or obligations under the Official Information Act, B.E. 2540 (1997).

Next Steps:

The Cabinet has directed submission of the draft to the Committee for the Scrutiny of Draft Legislation and Subordinate Legislation Proposed to the Cabinet. This review will incorporate observations from entities such as the Office of the Public Sector Development Commission, the Office of the Council of State, the Digital Government Development Agency, the National Economic and Social Development Council, and the National Security Council. Formal promulgation will follow upon completion.

Comparison with International Standards:

Thailand’s revisions demonstrate strong alignment with global best practices in electronic handling of classified information, which universally emphasize encryption, access controls, auditing, and secure storage.

•  United States: Executive Order 13526 and NIST SP 800-53 Revision 5 offer detailed, risk-based controls across multiple families (e.g., Access Control, System and Communications Protection). Thailand’s provisions mirror these in core areas but are less granular.

•  European Union: Council Decision 2013/488/EU requires approved cryptography for higher classifications and comprehensive information assurance. Thailand parallels this in transmission and storage requirements.

•  United Kingdom: The Official Secrets Act 1989 (as amended) and related policies incorporate encryption and secure systems, with recent enhancements under the National Security Act 2023 addressing contemporary threats.

•  ISO/IEC 27001: This standard mandates risk-based information classification and controls for transfer and protection. Thailand’s government-specific rules complement this approach.

Similarities include mandates for encrypted transmission, restricted access, secure storage, and audited destruction. Differences lie in depth: international frameworks like NIST provide extensive, customizable controls and certification requirements, whereas Thailand’s update remains procedurally focused on administrative adaptation.

Overall, this reform represents a commendable advancement toward international convergence, bolstering Thailand’s digital governance while upholding robust confidentiality safeguards. Further enhancements could involve adopting more detailed risk-based mechanisms and independent certification processes observed in mature systems.

Author: Panisa Suwanmatajarn, Managing Partner.

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Tax Obligations and Compliance for Foreign Residents in Thailand

Under Thailand’s taxation framework, foreign individuals residing in the country are subject to specific tax obligations, particularly when they are also liable for taxation in other jurisdictions. This article provides a comprehensive overview of the Thai tax system for individuals residing in Thailand for 180 days or more, including the requirements for filing tax returns, allowable deductions, the application of Double Taxation Agreements, and penalties for non-compliance.

Tax Residency and Taxable Income in Thailand:

According to Thai tax law, an individual who resides in Thailand for a cumulative period of 180 days or more within a calendar year (1 January to 31 December) is classified as a “tax resident of Thailand.” Tax residents are subject to Personal Income Tax (PIT) on the following categories of income:

  1. Income Derived from Sources Within Thailand:
Such income is taxable regardless of whether it is paid within Thailand or abroad.
  1. Foreign-Sourced Income:
Such income is subject to Thai PIT if it is earned on or after 1 January 2024 and remitted to Thailand in any year. However, foreign-sourced income earned prior to 1 January 2024 is exempt from Thai PIT, even if remitted to Thailand on or after 1 January 2024.

Tax Return Filing Requirements:

Thai tax residents who earn income from sources within Thailand or who remit foreign-sourced income to Thailand (as described above) are required to file a tax return with the Thai Revenue Department within 31 March of the following year for the preceding calendar year’s income.

Deductions and Allowances:

Not all income is subject to taxation, as certain types of income are exempt, including severance pay up to a specified amount, retirement benefits, and bank interest that has already been withheld at source. Additionally, taxpayers may claim deductions for various expenses based on the type of income received.

Double Taxation Agreements (DTAs) and Tax Credits:

To mitigate the risk of double taxation, Thailand has entered into DTAs with various countries. These agreements aim to prevent income from being taxed in both Thailand and the country where it was earned. Foreign residents subject to Thai PIT may be eligible for either a tax exemption or a foreign tax credit, depending on the provisions of the applicable DTAs and the type of income involved.

Penalties for Non-Compliance:

Failure to comply with the above requirements results in fines and surcharges.

Conclusion:

Foreign residents in Thailand who meet the 180-day residency threshold must carefully navigate their tax obligations to ensure compliance with Thai tax law. This includes understanding the scope of taxable income, both from Thai and foreign sources, fulfilling tax return filing requirements, leveraging allowable deductions and DTAs benefits, and adhering to deadlines to avoid penalties. By maintaining accurate records and submitting properly certified documentation, taxpayers can effectively manage their tax liabilities and ensure compliance with the Thai Revenue Department’s regulations. 

Source: International Comparison December 2025: Antea

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TISA Update – Government Responds to Industry Backlash with+ Proposed Reforms for Broader Equity Incentives

In a follow-up to our earlier publication, “Tax: Understanding TISA – Thailand’s New Tax-Incentivized Individual Savings Account for Thai Equities” (Tax: Understanding TISA – New Tax-Incentivized Individual Savings Account for Thai Equities – The Legal Co., Ltd.), which outlined the initial framework for the Thailand Individual Savings Account (TISA) as a promising tool to channel household savings into domestic equities amid Cabinet approval on December 9, 2025, recent developments reveal significant industry skepticism and swift governmental pledges for revisions. Just two days after the Economic Cabinet’s endorsement, Finance Ministry officials have announced plans to refine the scheme, addressing core criticisms that it lacks genuine incentives for stock investments, imposes tax traps on high earners, and fails to deliver structural market reforms. These adjustments aim to balance equity for low- and middle-income savers while restoring appeal for affluent investors, potentially injecting up to 1 trillion baht annually into the Stock Exchange of Thailand (SET).

The backlash, led by analysts and echoed across financial media, highlighted TISA’s resemblance to outdated Long-Term Equity Funds (LTFs) rather than transformative models like Japan’s NISA or the UK’s ISA. Critics argued that the 800,000-baht aggregate tax deduction cap—encompassing TISA, Retirement Mutual Funds (RMF), Super Savings Funds (SSF), Thai ESG Funds (TESG), and other vehicles—disproportionately benefits only 15.9% of Thais who pay personal income tax (PIT), while the proposed income-tiered multipliers (1.3x for earners below 1.5 million baht annually, versus 0.7x for those above) could effectively raise taxes for high-net-worth individuals, deterring their participation as the market’s primary liquidity providers.

Addressing Key Criticisms: Proposed Amendments to Enhance Appeal:

Later on, Deputy Prime Minister and Finance Minister convened stakeholders at the Ministry of Finance to review feedback, emphasizing that the contentious multipliers and income thresholds remain “preliminary models” subject to recalibration for fairness and efficacy. “We are not locking in any figures that could distort incentives or penalize savers; our goal is permanent, flexible long-term savings without the renewal uncertainties of past schemes like LTFs,” underscoring the scheme’s role in the “Quick Big Win” policy’s fifth pillar to combat Thailand’s declining savings rate (from 27% to 25% of GDP over the past decade) ahead of full aging society status.

Key proposed tweaks include:

1.  Refined Income-Tiered Deductions

       •  The 1.3x multiplier for sub-1.5 million baht earners (capping deductions at 1.04 million baht for 800,000-baht investments) will be retained to empower 11.4 million low- and middle-income households, but the 0.7x cap for higher earners (limiting them to 560,000 baht) is under review. Officials signal potential equalization to 1x across brackets or a graduated scale to avoid “tax traps,” ensuring high earners—who contribute over 60% of PIT revenue—retain motivation without subsidizing fiscal shortfalls exceeding 40 billion baht annually from prior incentives.

2.  Expanded Flexibility in Investments and Portfolios

       •  Unlike rigid predecessors, TISA will permit self-directed asset allocation across SET-listed stocks, bonds, ETFs, and mutual funds, with intra-account switches allowed without voiding deductions, provided a minimum five-year hold (or until age 55 for retirement-linked portions). This addresses complaints of a 55-year lock-in as overly restrictive, introducing up to 25% collateralization for emergency loans to enhance liquidity.

       •  A new 200,000-baht annual tranche, separate from the deduction cap, will exempt dividends, interest, and capital gains from tax—mirroring NISA’s success in boosting Japan’s investment-to-deposit ratio from 17% to 23.6% over a decade—directly countering the “no real return exemptions” critique.

3.  ESG and Thematic Boosters

       •  The 1.2x deduction multiplier for TESG investments remains, but with broadened eligibility to high-ESG or governance-scoring stocks, encouraging sustainable flows without mandating funds. This aligns with the SET’s Jump+ reforms, potentially channeling 100-200 billion baht yearly into green and blue economy sectors.

4.  Complementary Measures for Market Depth

       •  Parallel initiatives include monthly 1,000-million-baht issuances of “Savings Plus” government bonds (minimum 1,000 baht, app-based with full liquidity) and micro-insurance stamp duty exemptions to lower entry barriers. The Office of Insurance Commission (OIC) will also cut risk charges on equity investments from 25% to 18%, freeing up 100 billion baht annually from insurers for SET inflows.

These revisions, slated for Cabinet submission by late December 2025, target a July 1, 2026, rollout for the 2026 tax year, with the Securities and Exchange Commission (SEC) finalizing eligible assets.

What Stakeholders Should Prepare for in the Revised Framework:

1. Individual Investors and High-Net-Worth Clients

•  Model 2025-2026 tax scenarios incorporating potential 1x equalization and the 200,000-baht exemption tranche; prioritize dividend-yield stocks (e.g., banking sector at 5-7%) for tax-free income.

•  Stress-test portfolios for five-year horizons with switch flexibility, using the 25% loan collateral as a safety net.

2. Financial Institutions and Brokerage Firms

•  Upgrade platforms for dynamic TISA tracking, including multiplier calculations and exemption reporting; prepare for a surge in retail accounts (targeting 5-10 million users initially).

•  Collaborate on educational webinars to demystify self-directed options, focusing on ESG to capture the 1.2x premium.

3. Listed Companies and Investor Relations Teams

•  Accelerate ESG disclosures and dividend policies to qualify for incentives, anticipating 20-30% retail ownership growth; leverage TISA for targeted retail roadshows.

4. Tax Practitioners and Certified Financial Planners

•  Integrate TISA into holistic plans, phasing out expiring ThaiESG limits (down to 100,000 baht by 2027); advise on the new child investment exemptions under Section 40(4) to enable intergenerational wealth transfer.

Key Takeaways:

•  TISA’s initial design drew valid industry fire for weak stock incentives and high-earner disincentives, but December 11 announcements signal responsive tweaks toward NISA-like exemptions and flexibility, preserving the 800,000-baht cap while adding a 200,000-baht tax-free layer.

•  Reforms prioritize low-income access (1.3x deductions) but eye balanced multipliers to sustain high-earner flows, potentially averting market liquidity dips and injecting 500 billion-1 trillion baht yearly into equities.

•  With Cabinet review imminent and 2026 implementation on track, stakeholders must adapt swiftly: recalibrate models, enhance platforms, and educate on self-directed perks to capitalize on this pivot toward enduring savings culture.

•  Beyond TISA, holistic reforms—like monetary easing and governance upgrades akin to Japan’s “three arrows”—remain essential for true market revitalization.

This evolving TISA framework could yet emerge as a game-changer, fostering inclusive long-term investing if revisions temper fiscal conservatism with bold incentives. Early movers in compliant portfolios and advisory services will reap the rewards of Thailand’s maturing capital markets.

Related Article: Tax: Understanding TISA – New Tax-Incentivized Individual Savings Account for Thai Equities – The Legal Co., Ltd.

Author: Panisa Suwanmatajarn, Managing Partner.

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Progress in Thai–U.S. Trade Negotiations

On 12 December 2025, Thailand’s Minister of Commerce announced that the United States had conveyed a positive signal regarding the advancement of bilateral trade discussions. Washington indicated its intention to request the United States Trade Representative (USTR) to commence technical-level negotiations on tariffs and trade matters with Thailand.

This announcement follows intensified high-level engagement between both governments. In recent discussions, the U.S. President identified trade as a principal priority, committing to accelerate negotiations and reaffirm previous undertakings. The Department of Trade Negotiations within Thailand’s Ministry of Commerce has confirmed that technical-level discussions between Thailand and the United States are currently underway, with the 19% tariff rate on Thai goods remaining in effect. However, the resumption of technical-level dialogue indicates that future adjustments may be possible, underscoring the importance for businesses to remain vigilant and prepared.

Furthermore, the Thai Minister of Commerce reported that during her meeting with the U.S.–ASEAN Business Council (USABC), American companies and USABC members consistently advocated for both governments to expedite trade negotiations to unlock additional commercial and investment opportunities. Accelerated progress would benefit U.S. companies operating in Thailand, Thai exporters, and American consumers by facilitating access to high-quality products at competitive prices. This is particularly significant for sectors where the United States maintains import dependency, including Thai jasmine rice and other agricultural commodities, as well as broader manufacturing and supply-chain operations connected to Thailand.

The development has been characterized as an encouraging indication that the U.S. administration shares Thailand’s commitment to strengthening economic relations through a stable and predictable trade and taxation framework, notwithstanding broader geopolitical considerations. According to the Minister, such a framework would support sustainable growth in bilateral trade and investment while providing enhanced certainty for cross-border business planning.

Implications for Investment Structuring and Risk Management

The renewed trade engagement between Thailand and the United States necessitates a reassessment of existing investment structures and contractual arrangements. Export-oriented enterprises and operations integrated into U.S.-linked supply chains should evaluate corporate structures, transfer pricing mechanisms, and long-term commercial agreements to ensure continued operational efficiency under both the current tariff regime and potential future modifications. Strategic legal and tax planning can assist investors in mitigating compliance and cost-related risks while maintaining flexibility to capitalize on more favorable trade conditions as negotiations advance.

Conclusion

These developments represent a favorable outlook for investors and businesses with exposure to Thai–U.S. trade relations. Renewed momentum in bilateral negotiations reinforces confidence in Thailand as a strategic trade and investment destination while emphasizing the critical importance of proactive legal and regulatory planning. Investors, importers, exporters, and multinational corporations are advised to monitor these negotiations closely, as forthcoming developments regarding tariffs, trade regulations, and approval processes may directly impact investment structures, operational costs, and market access opportunities.

Author: Panisa Suwanmatajarn, Managing Partner.

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Quick Big Win Program: Strengthening Thai SMEs Through Integrated Financial and Tax Measures

The Cabinet has approved a comprehensive policy package under the “Quick Big Win” Program designed to strengthen small and medium-sized enterprises (SMEs), which form a cornerstone of Thailand’s national economy. With an allocated budget of THB 21.75 billion, the program delivers immediate and measurable economic outcomes through enhanced access to financing, reduced financial burdens, and improved SME competitiveness.

The program is implemented in coordination with relevant government agencies and state-owned financial institutions to ensure efficient and timely execution of all measures.

Policy Rationale

The policy framework provides Thai SMEs with essential support to facilitate economic recovery and sustain their vital role in driving production, employment, and investment. The program addresses critical economic challenges, including:

  • Escalating operational costs
  • Intensified competition from foreign businesses
  • Ongoing liquidity constraints affecting SME operations

Key Program Components

I. Financial Measures: Strengthening SME Liquidity

  1. SMEs Quick Big Win Credit Guarantee Program

Implemented by the Thai Credit Guarantee Corporation (TCG) with a budget of THB 10.5 billion, this program enables SMEs to access timely financing from financial institutions at competitive interest rates. The program minimizes additional fees beyond standard guarantee charges, thereby reducing both direct and indirect burdens for SMEs and participating financial institutions.

The program comprises three distinct components:

Credit Guarantee Program for General SMEs (SMEs Go Big)
Provides credit guarantees to general SME operators, facilitating access to adequate financing from financial institutions to support business operations and enhance lender confidence.

Credit Guarantee Program for Micro SMEs (SMEs Smart Win)
Offers tailored credit guarantees for micro-SMEs, enabling small-scale entrepreneurs to obtain formal funding with reduced barriers and improved financial inclusion.

Credit Guarantee Program for Contractors and Procurement-Related SMEs (SMEs Quick LG)
Supports SMEs engaged in construction, procurement, or contracting activities with government agencies, state-owned enterprises, and private sector entities through credit guarantees for Letter of Guarantee (LG)-based financing.

  1. Additional Financial Support Programs

Low-Interest Business Revival Loans by Government Savings Bank (GSB)
This initiative supports the revitalization of Thai businesses under the “Reinvent Thailand” framework, with eligibility criteria and loan conditions established in consultation with the Thai Bankers’ Association, the Thai Chamber of Commerce, and the Federation of Thai Industries.

Sustainable Thai Credit Program (Phase 3) and SME Thai Chaiyo Loan by Bank for Agriculture and Agricultural Cooperatives (BAAC)
These programs provide targeted financial support to SMEs while promoting sustainable business practices.

Export Market Expansion Support by EXIM Bank
This program assists Thai SMEs in expanding into international markets without requiring government budget compensation.

II. Tax Measures: Promoting Fair Competition

1.    Revenue Department Initiatives

      e-Tax Project

Promotes SME adoption of electronic tax systems through support from larger corporate partners. The Revenue Department provides   

tax incentives, expedited VAT refunds, and compliance certification for eligible SMEs.

Fast Track Tax Refunds

Streamlines and accelerates corporate income tax refunds for low-risk taxpayers through a centralized Fast Track system utilizing   

PromptPay transfers.

2.   Customs Department Initiative

De Minimis Value (DMV) Adjustment
Effective 1 January 2026, import duties will be imposed on all goods purchased through online platforms from the first baht. This measure ensures a level playing field and enhances the competitiveness of domestic businesses.

III. Additional Support Measures

PromptBiz for Government Procurement
Connects government procurement and payment data with financial institutions, enabling SME contractors to access secure and expedited financing through verified contract and payment information.

SME Incentives in Public Procurement
Certified SMEs with annual revenue up to THB 500 million and e-Tax compliance receive additional scoring advantages in government contract evaluations, promoting equitable access to procurement opportunities and encouraging tax compliance.

Thai E-Commerce Platform Development
To reduce reliance on foreign platforms with high transaction fees, the government plans to establish a domestic e-commerce platform. This initiative will empower SMEs and local entrepreneurs, including agricultural producers, to conduct digital trade efficiently and contribute to national economic growth.

Program Benefits

The Quick Big Win Program delivers three primary benefits:

  • Enhanced Liquidity for SMEs Across Key Segments – Improved access to working capital and operational funding
  • Improved Competitiveness and Operational Efficiency – Reduced costs and streamlined administrative processes
  • Expanded Opportunities and Access to Funding – Broader participation in government procurement and export markets

Current Program Status

Following the dissolution of Parliament, the Quick Big Win Program remains fully operational. As the program received Cabinet approval on 2 December 2025, its implementation continues under the authority of the relevant government agencies and state-owned financial institutions in accordance with Cabinet resolutions.

Conclusion

The Quick Big Win Program represents a comprehensive governmental approach to strengthening Thai SMEs amid persistent economic challenges. By integrating credit guarantees, low-interest financing, tax facilitation, and fair-trade measures, the program directly addresses liquidity constraints while building long-term competitive capacity. Coordinated implementation among government agencies and state financial institutions ensures effective and timely delivery of support. These integrated measures expand access to funding, promote fair competition, and encourage digital transformation and sustainable business practices. The program reinforces the critical role of SMEs in sustaining production, employment, and investment, thereby contributing to Thailand’s economic recovery and long-term sustainable growth.

Author: Panisa Suwanmatajarn, Managing Partner.

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Tax: Understanding TISA – New Tax-Incentivized Individual Savings Account for Thai Equities

Thailand is advancing toward the implementation of the Thailand Individual Savings Account (TISA), a strategic tax-advantaged investment framework intended to redirect household savings into domestic equities and mutual funds while providing substantial personal income tax deductions. Drawing inspiration from Japan’s Nippon Individual Savings Account (NISA), TISA is positioned as a cornerstone of the government’s Quick Big Win policy under the fifth pillar, aimed at fostering long-term savings and revitalizing the Thai capital market.

Recently, the Ministry of Finance (MoF) has presented the TISA proposal to the Economic Policy Committee for initial approval, with a subsequent Cabinet review scheduled for December 9, 2025.  This follows in-principle endorsement from the Economic Cabinet earlier in the year, elevating the annual tax-deductible contribution ceiling to 800,000 baht.  Upon final approval, regulations from the Revenue Department and Securities and Exchange Commission (SEC) are anticipated to enable rollout for the 2026 tax year, covering income earned in 2025. Recent analyses indicate TISA could inject significant liquidity into the Stock Exchange of Thailand (SET), particularly benefiting high-dividend sectors such as banking, while enhancing market confidence amid global uncertainties.

Key Features of TISA (Based on Proposed and Approved Framework):

1.  Eligible Participants

       •  Thai resident individuals (natural persons only).

       •  Limited to one TISA account per taxpayer, administered through asset management companies (AMCs), commercial banks, or brokerage firms.

       •  No specified minimum age, though contributions require assessable income; aligns with existing retirement savings vehicles like Super Savings Funds (SSF) and Retirement Mutual Funds (RMF).

2.  Annual Tax-Deductible Contribution Limit

       •  Up to 800,000 baht per year, inclusive of contributions to qualifying mutual funds (e.g., RMF, SSF, and Thai ESG Funds – TESG).

       •  This limit supplements deductions from other long-term savings instruments, potentially allowing high earners to deduct over 1.5 million baht annually in aggregate.

3.  Eligible Investments

       •  Primarily SET- and mai-listed ordinary and preferred shares.

       •  Expanded to include mutual fund units (RMF, SSF, TESG), bonds, and select exchange-traded funds (ETFs) tracking Thai equities; foreign securities and non-listed assets excluded initially.

       •  Enhanced incentives for sustainable investing: A 1.2x deduction multiplier for TESG contributions targeting companies with strong Environmental, Social, and Governance (ESG) performance.

4.  Holding Period Requirement

       •  Minimum one calendar year for investments to qualify for full benefits, with potential extensions to five years in equity-specific tranches to promote long-term discipline.

       •  Premature withdrawals or sales may result in retroactive disallowance of deductions, plus applicable penalties and interest.

5.  Tax Treatment of Gains

       •  Capital gains, dividends, and investment income within the TISA account are proposed to be fully exempt from personal income tax, mirroring NISA’s structure.

       •  This exemption applies post-holding period, providing a structural edge over standard taxable brokerage accounts.

6.  Lifetime or Cumulative Cap

       •  No fixed lifetime limit proposed, offering greater flexibility than Japan’s NISA (which caps cumulative investments at 18–60 million yen depending on the variant); however, annual caps ensure fiscal prudence.

What Stakeholders Should Prepare Immediately:

1. Individual Investors and High-Net-Worth Clients

•  Assess 2025 taxable income to project 2026 contribution capacity, integrating TISA with SSF/RMF/TESG for optimized deductions.

•  Curate a diversified portfolio of SET-listed dividend stocks (e.g., banking sector leaders) and TESG funds, prioritizing ESG-aligned assets for the 1.2x multiplier.

•  Initiate account setup with SEC-approved providers by Q1 2026; monitor MoF announcements for exact launch protocols.

•  Engage certified financial planners to model scenarios, factoring in the one-year minimum hold and potential government co-contributions.

2. Financial Institutions and Brokerage Firms

•  Expedite TISA-compliant platform integrations for account opening, transaction tracking, and automated tax reporting.

•  Develop compliance frameworks for the one-account rule and holding period enforcement, including penalty computation tools.

•  Launch targeted campaigns highlighting tax-exempt dividends and ESG multipliers to attract retail inflows, estimated to boost market liquidity significantly.

3. Listed Companies and Investor Relations Teams

•  Bolster retail-focused disclosures, emphasizing dividend policies and ESG metrics to capitalize on TISA-driven domestic demand.

•  Anticipate heightened scrutiny on long-term value creation, aligning with the SET’s Jump+ initiative for enhanced governance.

4. Tax Practitioners and Certified Financial Planners

•  Revise advisory models to incorporate TISA’s 800,000-baht layer and ESG enhancements, ensuring clients understand irrevocable commitments.

•  Prepare for inter-scheme coordination, as TISA may phase in as a successor to maturing SSF programs by end-2025.

Key Takeaways:

•  TISA establishes an 800,000-baht annual tax deduction for Thai equities and qualifying funds, with tax-exempt gains post-holding period and a 1.2x ESG multiplier, poised for Cabinet approval on December 9, 2025.

•  By promoting one-year-plus investments, it cultivates financial discipline and could sustain SET liquidity, especially in dividend-rich sectors, amid foreign inflow volatility.

•  High earners stand to realize compounded tax savings exceeding 200,000 baht annually when layered with existing vehicles, underscoring the need for proactive portfolio alignment.

•  Stakeholders must prioritize system readiness and education by early 2026 to harness TISA’s potential in fortifying Thailand’s retail investor ecosystem and economic resilience.

TISA signifies a transformative policy pivot, channeling public savings into sustainable market growth while mitigating reliance on external capital. Prudent early adoption, grounded in rigorous planning, will maximize its fiscal and wealth-building advantages.

Author: Panisa Suwanmatajarn, Managing Partner.

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