Improved tax incentives for investment in Thai ESG Funds approved by cabinet

Improved tax incentives for investment in Thai ESG Funds approved by cabinet

On 30 July 2024 the Thai cabinet approved in principle a Draft Ministerial Regulation proposed by the Ministry of Finance to improve the personal income tax incentives for investment in Thai ESG funds.

The main changes are:

• The minimum period that the investment units in a Thai ESG fund must be held is reduced from 8 years to 5 years for investment units purchased from 1 January 2024 to 31 December 2026.
• The maximum tax deduction allowed in a year is increased from Baht 100,000 to Baht 300,000, but not exceeding 30% of the investor’s assessable income.

In case of investment units purchased between January 1, 2024 and the effective date of the Ministerial Regulation, taxpayers will be entitled to a deduction for the purchase of investment units at the rate of 30% of the assessable income for the portion not exceeding Baht 300,000 baht and the minimum holding period will be reduced to 5 years.

The investment in Thai ESG funds will not be counted with investment in other retirement savings funds, including retirement mutual funds and provident funds, which currently have a combined tax deduction ceiling of not more than Baht 500,000.