Corporate income tax exemption for greenhouse gas reduction

          Thailand aims to achieve a 40% reduction in greenhouse gas emissions (NDCs) by 2030 under the Paris Agreement. Thailand aims to achieve carbon neutrality by 2050 and achieve net zero emissions by 2065.

To promote and incentivize participation in the greenhouse gas emissions project, the government therefore issued two tax measures, as follows:

1. Measures to promote voluntary emission reduction projects: Exemption from corporate income tax on net profits generated from sales of domestic carbon credits for companies or juristic partnerships participated in the voluntary emission reduction projects registered with the Greenhouse Gas Management Organization (Public Organization), effective until 31 December 2027 for a period of three consecutive accounting periods;

2. Tax measures to promote the implementation of the Community Forest Partnerships for Global Warming Reduction Project: Increase the tax privileges for natural persons in the form of tax deductions on donations to the Royal Forest Department, with the aim of supporting the Community Forest Partnerships for Global Warming Reduction Project of the Ministry of Natural Resources and Environment.

          This project provides personal income tax exemptions on income equal to the amount of the donation. However, when combined with the donation under Section 47 (7) of the Revenue Code, the amount must not exceed 10% of the taxable income after expense and other deductions. Donations of companies or juristic partnerships donated to the Royal Forest Department are still eligible for corporate income tax exemption.

          These exemptions are made in order to support the Community Forest Partnerships for Global Warming Reduction Project of the Ministry of Natural Resources and Environment. Both individual and juristic person donations must be made through the e-Donation system of the Revenue Department from 1 January 2023 to 31 December 2027.

          Such measures, in addition to reducing global warming, also drive the national strategy of building growth on the quality of life in an eco-friendly manner, in line with the master plan under the national strategy on sustainable growth and the National Economic and Social Development Plan.