On 08 Nov 2021, Thailand Tax Royal Decree (No 735) was gazetted providing resident individuals and corporate entities with personal and corporate tax incentives for investments in Social Enterprises.

This Insight summarizes the investment incentives under RD (No 735).

Social Enterprises

A "Social Enterprise" is a company or juristic partnership established for the purposes under the law governing Social Enterprises including promotion of employment, solving problems or developing the community, society or the environment without any generation of profits for shareholders or partners.

The Tax Incentives Under Royal Decree (No 735)

Applicability

From and including 09 Nov 2021.

Resident Individuals

For investments by resident individuals in the shares or a partnership holding to establish or to increase the capital of a Social Enterprise:

• An exemption from assessable income (personal tax deduction) for the amount of the investment, but not exceeding 100,000 baht per tax year.

Corporate Entities

For investments by corporate entities in the shares or a partnership holding to establish or to increase the capital of a Social Enterprise:

• An exemption from assessable income (corporate tax deduction) for the amount of the investment (no limit per tax year).

Rules, Procedures and Conditions

The rules, procedures and conditions specified in the Royal Decree (No 735) are as follows:

1. A Social Enterprise established under the law governing social enterprises shall be registered with the Revenue Department,
2. The investors in the shares or partnership holding shall hold the shares or partnership holding until the Social Enterprise is dissolved,
3. If a Social Enterprise dissolves within 5 years of the date of establishment and registration, the rights to the investment incentive are cancelled and investors shall include in assessable income the investment incentive tax deductions from the 1st year,
4. If a Social Enterprise does not comply with the rules for social enterprises, the rights to the investment incentive are cancelled and the investors shall include in assessable income the investment incentive tax deductions from the 1st year, and
5. The Revenue Department's additional rules, procedures and conditions shall be complied with.

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