Thai ESGX Fund tax measures approved

Thai ESGX Fund tax measures approved

On 11 March 2025 the Thai Cabinet approved in principle a draft Ministerial Regulation proposed by the Ministry of Finance to provide personal income tax deductions to support the establishment of a special Thai Sustainable Mutual Fund (Thai ESGX).

Thai ESGX is a new fund in the “Thai ESG” category of mutual funds, that supports holders of units in long-term equity funds (LTFs) exchanging their LTF units for units in Thai ESGX funds.

Personal income tax deduction for exchanging LTF units for Thai ESGX units

The draft Ministerial Regulation issued under the Revenue Code provides that the value of all investment units held in LTF funds and exchanged for units in Thai ESGX can be claimed as a personal income tax deduction, but not exceeding Baht 500,000 in total.

In the 2025 tax year, the tax deduction cannot exceed Baht 300,000, and in the 4 tax years 2026-2029, the tax deduction cannot exceed Baht 50,000 per annum.

LTF unitholders must express their intention to exchange all of their LTF units into Thai ESGX units to receive tax benefits within 2 months from the date the Thai ESGX fund opens for the first exchange of units, but no later than June 30, 2025. They must also hold their Thai ESGX units for not less than 5 years from the date of the exchange of units.

In this regard, the calculation of the income to be eligible for the personal income tax deduction shall use the number of investment units on the date of the Cabinet's approval, and the value of the investment units shall be considered the price on the date of notification of intention.

Any money or benefits received from the sale of Thai ESGX units held for at least 5 years shall be exempt from personal income tax.

Personal income tax deduction for purchase of Thai ESGX units

The draft Ministerial Regulation provides a personal income tax deduction for the purchase of Thai ESGX units in the 2025 tax year separate from the current personal income tax deduction for Thai ESG funds.

The money paid to purchase investment units in a Thai ESGX Fund can be claimed as a personal income tax deduction up to 30 percent of assessable income, but not exceeding Baht 300,000, provided that the purchase of investment units in the Thai ESGX Fund is made within a period of 2 months, from 1 May to 30 June, 2025.

Any money or benefits received from the sale of the investment units shall be exempt from personal income tax.

Investors must hold their investment units in Thai ESGX Funds for at least 5 years from the date of purchase to be eligible for these tax benefits.

For 2026 onwards, the personal income tax deduction limit for purchase of investment units in Thai ESGX funds will be included in the same personal income tax deduction limit for Thai ESG funds, which the law stipulates can be deducted up to 30% of assessable income, but not exceeding Baht 300,000 per year, and the investor must hold their investment units for at least 5 years.