On 14 Jun 2022, Thailand tax Royal Decree (No 749) was gazetted, extending the 25% corporate tax deduction concession for purchases of biodegradable plastic products for a further 3 years from 1 Jan 2022 to 31 Dec 2024.

This Insight has been updated for the enactment of Royal Decree (No 749).

The Tax Concession under Royal Decree (No 749)

The 25% corporate tax deduction concession for the purchase of biodegradable plastic products under Royal Decree (No 702) ended on 31 Dec 2021, but as the government's policy is to continue to encourage the purchase of biodegradable plastic, instead of non-degradable plastic, Royal Decree (No 749) was issued for extending the tax concession for 3 more years, as follows:

Applicability

For the period of 01 January 2022 to 31 December 2024.

Purpose

For the purpose of encouraging Thailand corporate entity businesses to switch their purchases from plastic to biodegradable plastic.

The Tax Deduction Concession

For the cost of purchasing bio-plastic products during the period of 1 Jan 2022 to 31 Dec 2024, a corporate tax deduction for 125% of the purchase costs, i.e.:

• The usual 100% deduction for the purchase costs; plus
• An additional 25% deduction for the purchase costs.

Rules, Procedures and Conditions

The rules, procedures and conditions prescribed in Royal Decree (No 749) are as follows:

1. The bio-plastic purchased by a corporate entity claimant shall be those bio-plastic products certified by the Office of Industrial Economics; and
2. The corporate entity claimant shall also comply with the Revenue Dept's additional rules, procedures and conditions.

Caution

If the Revenue Department's tax audit officers find any of the 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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