On 19 March 2023, Thailand Tax Royal Decree (No 760) was gazetted, entitling corporate entities in Thailand to an exemption from corporate tax for income derived from the sale of greenhouse gas reduction carbon credits.

Royal Decrees were issued for this corporate tax exemption in 2011 and in 2020, and one has been issued again in 2023.

This Insight has been updated for the tax exemption under RD (No 760).

The Corporate Tax Exemption under RD (No 760)

Applicability

Greenhouse gas emission projects registered with the Thailand Greenhouse Gas Management Organization (TGO) from 20 Mar 2023 to 31 Dec 2027.

The Tax Exemption

Exemption from corporate income tax on the amount of net income derived from the sale of carbon credits for three consecutive financial years.

Rules, Procedures and Conditions

The rules, procedures and conditions prescribed in the Royal Decree (No 760) are the following:

1. The gas emission reduction projects are voluntary projects;
2. The corporate entity's projects shall be registered with the TGO from the date of 20 Mar 2023 to the date of 31 December 2027;
3. The exemption from corporate income tax is for the amount of net income that is derived from the sale of carbon credits in Thailand;
4. The 3 consecutive financial years period commences in the year the TGO issues its certificate of registration for the projects; and
5. The corporate entity claimant shall comply with the Revenue Departments additional rules, procedures and conditions.

Caution​

If the tax audit officers find any of the Revenue Department's rules, procedures or conditions have not been met, the entitlement to the concession may be lost, and back-taxes plus penalty and surcharge could be payable.

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