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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The backlash, led by analysts and echoed across financial media, highlighted TISA’s resemblance to outdated Long-Term Equity Funds (LTFs) rather than transformative models like Japan’s NISA or the UK’s ISA.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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Thailand : Penalties of non-tax compliance

Introduction

Taxes in Thailand are imposed in various forms, and the authorities governing each form of payment are separated from each other. The main authorities governing the tax collection in Thailand will be as follows:

  • Revenue Department – Responsible for collecting personal income tax, corporate income tax, value-added tax (VAT), withholding tax, specific business tax, and stamp duty.
  • Excise Department – Responsible for collecting excise taxes.
  • Customs Department – Responsible for collecting customs duties on imported and exported goods.
  • Local Administrative Authorities – Responsible for collecting local taxes, including land and building tax and signboard tax.

If a taxpayer fails to comply with the obligations to pay the taxes referred to above, neglects or refuses to act in accordance with the law, evades taxes, or provides

false information, the relevant authorities are entitled to impose fines, additional charges, and in some cases, criminal penalties against such taxpayer.

Personal Income Tax (PIT)Failure to file or late submission of a tax returnFine not exceeding 2,000 THBSection 35 of the Revenue Code
Failure to file a tax return to evade taxFine not exceeding 200,000 THB or imprisonment for a term not exceeding 1 year or bothSection 37 Bis of the Revenue Code
Giving false statement or evidence to evade taxImprisonment for a term of 3 months to 7 years, and a fine of 2,000 to 200,000 THBSection 37 of the Revenue Code
Late payment of assessed taxSurcharge of 1.5 percent per month and a fine of 2,000 THB imposed on the period of the month that the tax has not yet been paidSection 27  of the Revenue Code
Corporate Income Tax (CIT)Failure to file or late submission of a tax returnFine not exceeding 2,000 THBSection 35 of the Revenue Code
Failure to file a tax return to evade taxFine not exceeding 200,000 THB or an imprisonment for a term not exceeding 1 year or bothSection 37 Bis of the Revenue Code
False statement or gives false statement or evidence to evade taxImprisonment for a term of 3 months to 7 years, and a fine of 2,000 to 200,000 THBSection 37 of the Revenue Code
Late payment of assessed tax Surcharge of 1.5 percent per monthSection 27  of the Revenue Code
Value Added Tax (VAT)Operating a business without VAT registrationFine twice the tax due in the tax month for the duration of failure to comply with such provision, or 1,000 THB, whichever is greater.
Imprisonment up to 1 month, or a fine up to 5,000 THB, or both		Section 89 (1) of the Revenue Code
Section 90/2 of the Revenue Code
Late or missing VAT return/paymentFine twice the amount of tax due or remittable in the tax monthSection 89 (2) of the Revenue Code
Filing a VAT return or remitting VAT incorrectly, causing the VAT due or remitted to be under- or over-statedAdditional penalty equal to the amount of underpaid or overpaid VATSection 89 (3) of the Revenue Code
Filing an incorrect VAT return resulting in understated output VAT or overstated input VATFine for the amount of the deficient output tax or excess input taxSection 89 (4) of the Revenue Code
Using false tax invoice in tax calculation partly or whollyFine twice the amount of tax on such an invoiceSection 89 (7) of the Revenue Code
Late or incomplete VAT payment/remittance Surcharge of 1.5 percent per month on the unpaid VATSection 89/1 of the Revenue Code
Failure to issue or deliver a tax invoiceImprisonment up to 1 month, or a fine up to 5,000 THB, or bothSection 90/2 of the Revenue Code
Failure to prepare VAT-related reportsImprisonment up to 6 months, or a fine up to 10,000 THB, or bothSection 90/3 of the Revenue Code
Specific Business taxOperating a business subject to specific business tax without registrationImprisonment not exceeding 1 month or a fine not exceeding 5,000 THB or bothSection 91/18 of the Revenue Code
Failure to prepare a record of taxable and exempt gross receiptsImprisonment not exceeding 6 months or a fine not exceeding 10,000 THB or bothSection 91/19  of the Revenue Code
Stamp DutyNeglecting or refusing to pay duty or cancel stampFine not exceeding 500 THBSection 124  of the Revenue Code
Customs DutyFailure to comply with the Customs Act, including the failure to submit goods
declaration, pay the full amount of duties, or provide a security deposit		Fine not exceeding 50,000 THBSection 208  of Customs Act 2017
Withholding taxFailure to pay or remit withholding tax within the prescribed periodSurcharge of 1.5 percent per month and fine of 2,000 THB imposing on the period of the month that the tax has not yet been paidSection 27 of the Revenue Code
Failure to issue withholding tax certificatesFine not exceeding 2,000 THBSection 35 of the Revenue Code
Failure to withhold or remit the full Withholding TaxPayer is jointly liable with the payee for the unpaid Withholding TaxSection 54 of the Revenue Code

Source: International Comparison November 2025: Antea

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Sharing Economy Update: Refining Thailand’s Accommodation Act to Meet Modern Tourism Trends

Following the previously published article “Sharing Economy: Modernizing Thailand’s Accommodation Legislation for Evolving Tourism Trends” (Sharing Economy: Modernizing Thailand’s Accommodation Legislation for Evolving Tourism Trends – The Legal Co., Ltd.), which provided an overview of the first draft of the Accommodation Act (“Act”) and its efforts to modernize regulatory frameworks in response to emerging tourism models and sharing-economy platforms, the second draft of the Act has now been released and is currently open for public hearing. Whereas the first draft focused primarily on updating definitions, easing certain regulatory burdens, and recognizing new forms of accommodation, the second draft aims to enhance regulatory clarity, balance consumer protection with business flexibility, and address concerns raised during the initial hearing process.

Key Revisions in the Second Draft

The second draft introduces the following substantive revisions:

1. Electronic Systems and Electronic Transactions

The second draft establishes a clear one-year deadline for implementing the required electronic system, ensuring timely and practical deployment. It also expands the scope of electronic transactions by permitting applications, notifications, all complaints, and any other relevant issues under the Act to be submitted electronically. This enhancement improves accessibility, reduces administrative delays, and safeguards operators’ rights during system transitions.

2. Enhanced Control Over Registrar Discretion

Registrars are now explicitly prohibited from refusing registration when applicants satisfy all legal qualifications. This provision minimizes the risk of arbitrary decision-making, reduces opportunities for misconduct, and strengthens overall transparency in the registration process.

3. Exclusion of Monthly Condominium Units from the Accommodation Framework

The second draft excludes monthly condominium rentals from classification as an accommodation under this Act, thereby preventing regulatory overlap with the Condominium Act. This exclusion eliminates unnecessary regulatory burdens on long-term residents and resolves ambiguity regarding whether monthly units should fall within the definitions of hotels or accommodation.

4. Enhanced Protection for Accommodation Service Users

A new chapter introduces comprehensive consumer protection measures, including formal recognition of platform services (e.g., Agoda, Booking.com, Airbnb), fair-contract requirements preventing unilateral amendments by operators, and strengthened safety and information disclosure standards. These provisions reflect contemporary digital-era booking practices and ensure greater transparency and fairness for users.

5. Restructured Penalties and Expanded Director Liability

Penalty provisions have been reorganized to clearly distinguish criminal penalties from administrative fines, creating a more systematic enforcement structure. Director liability has been expanded to prevent avoidance of responsibility for corporate violations, while enhanced penalties have been introduced to incentivize operator compliance.

Conclusion

The second draft of the Accommodation Act, currently undergoing public hearing until 3 December 2025, reflects the government’s continued commitment to modernizing Thailand’s accommodation regulatory framework. The draft seeks to enhance regulatory clarity, balance consumer protection with business flexibility, and address stakeholder concerns raised during the initial hearing process.

Overall, the revised draft demonstrates a forward-looking approach that aligns with evolving tourism trends and supports a more efficient, transparent, and adaptable accommodation system in Thailand.

Related Article: Sharing Economy: Modernizing Thailand’s Accommodation Legislation for Evolving Tourism Trends – The Legal Co., Ltd.

Author: Panisa Suwanmatajarn, Managing Partner.

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U.S. Expands Tariff Exemptions on Key Agricultural Products: Implications for Global Trade

On 14 November 2025, the U.S. government issued an executive order entitled “Modifying the Scope of the Reciprocal Tariff with Respect to Certain Agricultural Products” (the “Executive Order“), which updates and expands the exemptions previously provided under the reciprocal tariff regime established on 2 April 2025.

The issuance of this Executive Order follows mounting political pressure arising from nationwide increases in consumer prices for supermarket goods. Over the past year, distributors have raised prices on beef, coffee, chocolate, and other common food products, primarily attributable to existing tariff measures.

On 17 November 2025, a White House spokesperson reiterated the U.S. government’s commitment to its tariff policy, emphasizing that it has generated trillions of dollars in investment and employment within the United States and facilitated unprecedented trade agreements that have benefited U.S. workers, industries, and farmers.

Exempted Products

The Executive Order introduces new exemptions covering a wide range of agricultural products—particularly items that the United States either cannot produce domestically or cannot produce in sufficient quantities. These include bananas, coffee, tomatoes, avocados, coconuts, oranges, pineapples, black tea, green tea, and spices such as cinnamon and nutmeg.

Although the tariff relief is intended to ease pressures on retail food prices, experts caution that global supply constraints may continue to drive costs upward. Coffee and beef remain particularly vulnerable given tight global supply conditions and the cumulative impact of the existing tariff framework.

Analysis of Key Exempted Products

Beef: The exemption for beef follows months of sharp price increases, partly driven by prior tariff policies. A severe supply squeeze—exacerbated by high tariffs on major suppliers and historically low U.S. cattle inventories—has pushed supermarket beef prices up by 12–18%.

Coffee: Coffee has emerged as one of the most visible examples of the unintended effects of tariff policy. The 50% tariff on Brazilian coffee, one of the United States’ top three suppliers, has significantly raised costs throughout the supply chain. As the U.S. does not cultivate its own coffee beans, businesses have had limited options to mitigate these cost increases.

Cocoa: Cocoa prices have faced similar upward pressure. While futures prices have softened slightly, they remain more than double pre-pandemic levels (approximately USD 5,300 per metric ton), driven by tariff measures and poor harvests in Côte d’Ivoire and Ghana.

Stakeholders Affected by the Modified Reciprocal Tariffs

The Executive Order modifying the scope of reciprocal tariffs on key agricultural products affects multiple stakeholders across the global supply chain. The primary groups include:

1. Importers, Distributors, and Retailers

  • U.S. businesses importing and distributing beef, coffee, cocoa, and other exempted products will experience changes in cost structures due to revised tariffs.
  • Retailers will benefit from reduced costs, potentially moderating consumer prices; however, global supply constraints may continue to impact pricing.

2. Foreign Exporters and Producers

  • Exporters, including Thai agricultural and food companies, will gain new market opportunities under the revised exemptions.
  • Producers in key exporting countries (e.g., Brazil for coffee, Côte d’Ivoire and Ghana for cocoa) will need to adjust production, harvesting, and logistics to meet changing U.S. demand.

3. Investors and Policy Makers

  • Investors in agricultural commodities and related industries may adjust their strategies in response to tariff changes and market signals.
  • Trade regulators and government agencies will oversee compliance with the modified tariff framework to ensure proper implementation and facilitate smooth trade flows.

Conclusion

The Executive Order modifying reciprocal tariffs on key agricultural products represents a significant development for international trade and market dynamics. By expanding exemptions for products such as beef, coffee, cocoa, and various fruits and spices, the policy aims to alleviate retail food price pressures while responding to political and economic concerns domestically. Although the relief provides opportunities for exporters—particularly within Thailand’s agricultural and food sectors—global supply constraints and market volatility will continue to impact prices. Stakeholders across the supply chain, including importers, distributors, exporters, producers, investors, and policy makers, must monitor regulatory updates closely, adjust strategies accordingly, and ensure compliance to capitalize on emerging opportunities under the revised tariff framework.

Author: Panisa Suwanmatajarn, Managing Partner.

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Quick Big Win Policy: Enhancing SME Growth, Competitiveness, and Economic Development

On 14 November 2025, the Ministry of Finance announced a comprehensive support package for small and medium-sized enterprises (SMEs) (the “Package“) under the government’s “Quick Big Win” policy. The Package is scheduled for consideration by the Economic Policy Committee.

1. Financial Measures: Strengthening SME Liquidity

The Ministry of Finance will provide low-interest loans (soft loans) to facilitate SME access to funding and enhance existing credit guarantee programmes.

Additionally, a new credit guarantee facility funded by the Financial Institutions Development Fund (FIDF) will be launched with more flexible terms to improve SME loan accessibility. The Bank of Thailand (BOT) is finalizing operational details to ensure seamless implementation.

2. Tax Measures: Promoting Fair Competition

Two tax-related initiatives have been prepared to support SME competitiveness:

  • Customs Measures – Import duties will be imposed on all goods purchased through online platforms from the first baht, effective 1 January 2026. This measure aims to ensure a level playing field and enhance the competitiveness of local businesses.
  • Revenue Measures – The tax authority will expedite tax refund processes to return liquidity to SMEs more efficiently.

3. Demand-Side Measures: Increasing Public Procurement from Thai SMEs

Government agencies will be encouraged to increase procurement of products from Thai SMEs. Government purchase orders will be recorded in a digital system, enabling SMEs to use verified orders as supporting documentation for bank loan applications and thereby improve their access to financing.

Key Benefits for Thai Citizens

1. Strengthened SMEs and Enhanced Employment Opportunities

Improved access to loans and credit guarantees enables SME growth, creating additional employment opportunities and increasing household incomes.

2. Fairer Market Competition

Customs measures on low-value imports protect local businesses, providing Thai SMEs with enhanced competitive opportunities and enabling them to offer diverse product ranges.

3. Support for Local Products and Economic Growth

Government procurement of Thai SME products increases sales opportunities and financial stability, stimulating broader economic development.

Conclusion

The Quick Big Win Policy provides a strategic framework for strengthening Thailand’s SMEs through financial support, equitable tax measures, and increased government procurement. By improving access to credit, promoting fair competition, and supporting domestic sales, the Package enhances SME growth, employment generation, and economic stability. The initiative represents a comprehensive approach to empowering SMEs as a key driver of Thailand’s sustainable economic development.

Author: Panisa Suwanmatajarn, Managing Partner.

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Thailand Targets 2026 as Investment-Driven Growth Year with Fast-Track Initiatives to Unlock 300 Billion Baht in Private Projects

The government has signaled a decisive shift toward investment-led economic growth for 2026, moving away from short-term consumption stimulus toward structural upgrades in human capital, industrial capabilities, and large-scale private-sector projects. After a series of fiscal measures helped the economy avoid a sharp slowdown in the final quarter of 2025, authorities now believe sustainable recovery must be anchored in accelerated private investment rather than continued household spending support.

Comprehensive Package:

It is expected that the Cabinet will pass the resolution to adopt a comprehensive package centered on three flagship programs designed to remove bottlenecks and catalyze new capital expenditure:

1.  The “Thailand Fast Pass” initiative, which will immediately unlock over 60 ready-to-proceed large-scale projects totaling more than 300 billion baht in committed investment for 2026. These projects, awaiting approval for investment promotion privileges, have been delayed by regulatory hurdles. The majority fall within high-growth sectors, including data centers, clean energy facilities, electric vehicles (EV), and printed circuit boards (PCB). Fast-track approvals will cover factory construction permits, water allocation, electricity connections, and other critical licenses, with Cabinet resolutions used to override remaining obstacles. The mechanism will later be institutionalized under ongoing regulatory reform efforts to prevent future delays.

2.  A 10 billion baht competitiveness enhancement fund for small and medium-sized enterprises (SMEs), providing subsidized upgrades of machinery, automation adoption, and cost-reduction measures to transition factories toward Industry 4.0 standards.

3.  An ambitious reskilling and upskilling program targeting 100,000 workers to meet demand in new S-curve industries, with a focus on advanced manufacturing, artificial intelligence, clean energy, and digital infrastructure.

In parallel, separate debt resolution frameworks for farmers and SMEs are being finalized, incorporating debt restructuring, interest relief, supply-chain financing, tax incentives for prompt payment, and mandatory transformation plans to prevent recurrence of non-performing loans. These measures are scheduled for Economic Cabinet review in the following weeks.

The strategy reflects recognition that Thailand can no longer rely on legacy advantages and must rapidly position itself as a regional hub for clean energy manufacturing, data center development, EV supply chains, and advanced electronics to remain competitive in a shifting global investment landscape.

Key Takeaways for Investment Opportunities:

•  2026 marks a clear policy pivot to private investment; expect significantly faster project execution in promoted sectors.

•  Data centers, renewable energy (especially floating solar and direct power purchase agreement), EV ecosystem, and PCB/electronics manufacturing face imminent regulatory clearance, creating a narrow window for early-mover positioning.

•  SME transformation subsidies and workforce upskilling will improve local supplier quality and capacity, indirectly supporting foreign investors reliant on Thai supply chains.

•  Debt relief programs combined with mandatory modernization requirements will strengthen the balance sheets of domestic partners in agriculture and manufacturing segments.

•  Overall easing of the regulatory environment, starting with the 300 billion baht fast track batch, signals broader structural improvement in Thailand’s ease of doing business ranking for large projects.

Author: Panisa Suwanmatajarn, Managing Partner.

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Digital Taxation Policy: Balancing Revenue Objectives with International Trade Pressures

The proliferation of digital platforms has fundamentally reshaped global commerce, enabling service delivery—encompassing e-commerce, digital advertising, and streaming—without necessitating a physical presence in consumer markets. This evolution has compelled governments worldwide to refine tax frameworks to capture value in the digital economy equitably. In Thailand, the government has implemented Value-Added Tax (VAT) obligations for foreign digital service providers since 2021, yet a direct digital services tax (DST) targeting profits or revenues remains under deliberation. This policy juncture represents a strategic calculus between fiscal revenue generation and mitigating pressures from key trading partners, particularly the United States. Within the context of the U.S.-Thailand Framework for Reciprocal Trade announced on October 26, 2025, Thailand’s commitment to refrain from imposing discriminatory digital services taxes underscores the interplay of domestic priorities and bilateral commitments.

Current VAT Regime for Foreign Digital Services:

Thailand mandates that non-resident digital service providers register for and remit VAT on services consumed within the country. Key elements of this framework include:

  • Revenue Threshold: Providers must register if annual revenues from Thai consumers exceed THB 1.8 million.
  • VAT Rate: A standard 7 percent rate applies, computed on the consumer-facing price.
  • Scope of Taxation: It encompasses electronic services delivered via the internet or digital platforms, where consumption occurs in Thailand.

This mechanism applies to prominent platforms such as streaming services (e.g., Netflix, YouTube, and Disney+), advertising networks (e.g., Google Ads, and Meta platforms), and other online intermediaries. By aligning with OECD-inspired models, Thailand ensures foreign entities contribute proportionally to public finances, fostering parity with domestic operators.

Status of Direct Digital Services Tax:

Notwithstanding the VAT framework, Thailand has not yet enacted a DST that directly taxes digital revenues or profits of foreign platforms. The Revenue Department, supported by the Electronic Transactions Development Agency (ETDA), continues to evaluate such measures. The ETDA has noted that while conceptual studies are underway, implementation hinges on broader policy alignment. This cautious stance reflects the absence of a profit-based levy, distinguishing Thailand from jurisdictions like France or Spain that have proceeded unilaterally.

Challenges and Geopolitical Considerations:

The prospective adoption of a DST entails multifaceted challenges:

  • Revenue versus Investment Dynamics: While intended to rectify imbalances between foreign giants and local firms, a DST could erode investor confidence, potentially discouraging technology inflows and innovation ecosystems.
  • International Trade Implications: Unilateral actions risk perceptions of discrimination, inviting retaliatory measures. U.S. legislation, such as provisions enabling trade countermeasures against perceived unfair taxation of American firms, amplifies this concern. Historical precedents in Europe demonstrate how DSTs have escalated tensions, prompting tariff threats on agricultural and industrial exports.
  • Strategic Trade-Offs: As articulated by ETDA, decisions may involve concessions in taxation to secure larger gains elsewhere, such as enhanced agricultural export access to the U.S. market under reciprocal trade frameworks.
  • The U.S.-Thailand Framework explicitly addresses this domain: Thailand pledges to abstain from digital services taxes or discriminatory measures against U.S. providers, alongside assurances for cross-border data flows and a WTO moratorium on electronic transmission duties. This commitment, while non-binding pending finalization, positions digital taxation as a bargaining lever in ongoing negotiations, potentially deferring DST rollout to preserve advantages in tariffs, non-tariff barrier reductions, and sectoral procurements (e.g., agriculture, energy, and aviation).

Opportunities and Policy Recommendations:

For Thailand, navigating this landscape offers avenues to bolster fiscal sustainability without alienating partners:

  • Harmonization with Global Standards: Prioritizing OECD Pillar 1 and 2 solutions could mitigate unilateral risks, ensuring multilateral consensus.
  • Incentive-Aligned Reforms: Couple any future DST with innovation incentives, such as R&D tax credits for digital investments, to sustain Thailand’s appeal as an ASEAN digital hub.
  • Bilateral Engagement: Leverage the Framework’s digital trade provisions to negotiate phased implementations, safeguarding U.S. interests while advancing domestic equity.

Stakeholders, including policymakers and industry actors, should monitor negotiations targeting year-end conclusion, with subsequent Cabinet and Parliamentary scrutiny.

Conclusion:

Thailand’s digital taxation policy exemplifies the intersection of fiscal imperatives, technological advancement, and geopolitical strategy. The established VAT regime marks progress in revenue capture, yet the deliberative approach to a DST—tempered by U.S. pressures and reciprocal trade commitments—highlights prudent calibration. Future resolutions will critically influence Thailand’s competitiveness in the global digital economy, underscoring the need for balanced, forward-looking frameworks that promote equitable growth and enduring international partnerships.

Author: Panisa Suwanmatajarn, Managing Partner.

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