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 gazetting of Royal Decree (No 749).

The Tax Concession under Royal Decree (No 702)

The 25% corporate tax deduction concession for the purchase of biodegradable plastic products under Royal Decree (No 702) ended on 31 December 2021, but as its the government's policy to continue to encourage businesses to purchase biodegradable instead of non-degradable plastic, a new Royal Decree has been issued to extend the tax concession for 3 more years.

The Tax Concession under Royal Decree (No 749)

Applicability

For a period of 3 years from 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 between 01 Jan 2022 and 31 Dec 2024, a corporate tax deduction concession 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 that are prescribed in Royal Decree (No 749) are the same as Royal Decree (No 702), which are as follows:

1. The bio-plastic purchased by a corporate entity claimant shall be those bio-plastic products that have been 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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