Additional tax deduction for the purchase of biodegradable plastic products

Under Royal Decree No. 749, a company or legal partnership can claim a tax deduction of 1.25 times (1 time as a normal deduction and 0.25 times as an additional deduction) the amount paid for the purchase of biodegradable plastic products from a manufacturer which is a VAT registrant with a certificate to manufacture products from the Office of Industrial Economics, Ministry of Industry. The expenses must be paid from 1 January 2022 to 31 December 2024.

Keywords: Mazars, Thailand, Tax, Ministry of Industry, VAT, Revenue Department,Biodegradable plastic products

9 August 2022

The Revenue Department issued Notification of the Director-General of the Revenue Department on Income Tax No. 425 (“Notification No. 425”), which specifies the types of biodegradable plastic products which qualify for the additional deduction under Royal Decree No. 749. These products are as follows:

1) Bags with straps

2) Garbage bags

3) Plastic drinking glasses

4) Single-used plastic plates, bowls, and trays

5) Plastic spoons, forks, and knives

6) Plastic straws

7) Plastic planting bags

8) Mulch film

9) Plastic bottles

10) Lids for drinking glasses

11) Sealing film used as lids for drinking glasses

The company or legal partnership which claims the additional deduction under Royal Decree No. 749 must prepare a report providing details of the biodegradable plastic products purchased. The report must contain at least that information set out in the form attached to Notification No. 425. The company must keep the report, including supporting documents for preparing the report, on record at its place of business in the event of a tax audit.