Forvis Mazars Payroll Flash News - April 2025 (Vol. 2)

On 28 March 2025, the Royal Gazette published Ministerial Regulation No. 398, which exempts the value of investment units in Long-Term Equity Funds (LTFs) converted to Extra Thai Sustainable Funds (ThaiESGX) from personal income tax. This exemption applies to transactions made by 30 June 2025, with the condition that the investment units must be held for at least five years from the date that the asset management company is notified of the intention to convert the units. Exceptions are made in the event of disability or death.

Taxpayers can deduct the value of the converted investment units from their taxable income up to a maximum of THB 500,000, as follows:

1. In 2025, the deduction can be equal to the actual amount invested, but cannot exceed 30% of annual income and is capped at THB 300,000.
2. For investments ranging from THB 300,000 to THB 500,000, a deduction can be spread over the next four years (2026-2029) at an average of THB 50,000 a year.

Examples of how the value of converted investment units can be used for tax deductions are provided below.

Example 1: If investment units valued at THB 800,000 are converted by the end of June 2025, the tax deduction can be utilized over 5 years, from 2025 to 2029, as follows:

- In 2025:

• Case 1: Mr. A, with annual income of THB 1,200,000, can claim the full deduction of THB 300,000.
• Case 2: Mr. B, with annual income of THB 700,000, can claim 30% of his income, amounting to THB 210,000.

- From 2026 to 2029:

• Case 1: Mr. A can claim the remaining deduction of THB 200,000, evenly spread over 4 years, allowing for an annual deduction of THB 50,000.
• Case 2: Mr. B can also claim up to THB 200,000, evenly distributed over those 4 years at THB 50,000 a year
   

Example 2: If investment units valued at THB 400,000 are converted by the end of June 2025:

- In 2025:

• Case 1: Mr. A, with annual income of THB 1,200,000, can claim the full deduction of THB 300,000.
• Case 2: Mr. B, with annual income of THB 700,000, can claim 30% of his income, amounting to THB 210,000.

- From 2026–2029:

• Case 1: Mr. A can claim an additional deduction of THB 100,000, distributed equally over 4 years, of THB 25,000 a year.
• Case 2: Mr. B can also claim THB 100,000, spread equally over those 4 years, of THB 25,000 a year.

Example 3: If investment units valued at THB 200,000 are converted by the end of June 2025:

- In 2025:

• Case 1: Mr. A, with annual income of THB 1,200,000, can claim the full deduction of THB 200,000.
• Case 2: Mr. B, with annual income of THB 700,000, can also claim the full deduction of THB 200,000.

- From 2026–2029:

• Case 1: Mr. A is not eligible for further deductions, as the total amount was utilized in 2025.
• Case 2: Mr. B is also not eligible for any additional deductions during this period.

Source (in Thai):

• Ministerial Regulation No. 398