2025 Personal Income Tax Update #1

Personal Income Tax

A tax allowance refers to items specified by law that can be deducted from assessable income after deducting expenses. It is a type of tax benefit designed to reduce the amount of tax payable or potentially increase the tax refund during tax calculations. For personal income tax planning in the calendar year 2025, updates to specific tax allowances are outlined below:

1. ESG Mutual Fund

In line with the government's ongoing policy to promote sustainable investments, on November 21, 2024, the Revenue Department issued Ministerial Regulation No. 395 under the Revenue Code governing tax exemptions, B.E. 2567. This regulation revises the conditions for tax allowances related to investments in Thai ESG (Environmental, Social, and Governance) mutual funds, including adjustments to the maximum allowance and the required holding period.

Under the updated regulation, individuals are eligible for a tax allowance when calculating personal income tax on investments in ESG mutual funds. The allowance applies to amounts not exceeding 30% of assessable income, with a cap of THB 300,000 (increased from the previous cap of THB 100,000) per tax year. The investment must be made during the period January 1, 2024, to December 31, 2026, and the mutual fund must be held for at least 5 years (reduced from the previous requirement of 8 years) from the date of purchase.

The table below illustrates the differences in tax benefits for ESG mutual fund investments across different periods:

Important: If the rules, procedures, and conditions are not followed, the entitlement to the tax allowance will be forfeited, and income tax must be paid on the previously claimed allowance.

For more details, please refer to Ministerial Regulation No. 395 in Thai at the following link:
https://www.rd.go.th/fileadmin/user_upload/kormor/newlaw/mr395.pdf