Tax Exemption Incentives Fueling Thailand’s Electric Vehicle Industry

Tax exemption for income received as government subsidies under the electric vehicle (EV) support program, encompassing both cars and motorcycles, is now in effect. This change is mandated by the “Royal Decree issued under the provisions of the Revenue Code regarding Tax Exemption (No. 773), B.E. 2566 (2023)”, effective as of August 16, 2023.

Here are the key details of this tax exemption:

✓   Companies or juristic partnerships are eligible for income tax exemption on subsidies received from the government in support of electric vehicles in the categories of cars and motorcycles. However, this exemption is contingent upon compliance with the rules, procedures, and conditions specified by the Director-General of the Excise Department.

✓   The income tax exemption applies to the accounting period during which the subsidy is received.

✓   Should a company or juristic partnership, having availed itself of income tax exemption under this Royal Decree, subsequently fail to adhere to the stipulated rules, their entitlement to income tax exemption under this Royal Decree will be revoked. Consequently, the company or juristic partnership will be required to include income tax exemption privileges in the calculation of net profit for income tax purposes during the accounting period in which such exemption was initially granted.

This measure has been introduced to promote the use of electric vehicles and bolster the electric vehicle industry within the country. By offering these tax incentives, the government aims to boost the demand for EVs and encourage investment in the EV industry in Thailand.

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Reduction in the Excise Duty on Electric Vehicles

Thailand BOI’s Smart Investment Initiative