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published on June 7, 2019 | reading time approx. 2 minutes
On June 4, 2019, the Cabinet decided to offer tax incentives to companies using biodegradable packaging. According to the Office of the Prime Minister, companies will be allowed to claim deductions from the assessable income regarding the Corporate Income Tax (CIT) in the amount of 1.25 times the expenses for biodegradable plastic packaging purchased between 1 January 2019 and 31 December 2021. It remains to be seen how the Revenue Department will enact the decision.
The resolution underlines Thailand's efforts to reduce plastic waste, in line with the recently adopted Roadmap on Plastic Waste Management. According to the Road Map, Thailand will ban certain plastics by the end of 2019, including plastic cap seals for water bottles. By 2022, Thailand will ban other plastic products, including plastic bags with less than 36 microns in thickness, plastic straws, plastic single-use cups, and styrofoam food boxes.
Furthermore, Thailand is encouraging growth in the domestic bioplastic industry. The Thai Board of Investment offers promotions including tax incentives such as tax exemption for eco-friendly projects, e.g., manufacture of eco-friendly chemicals (up to 8 years CIT exemption), manufacture of products from eco-friendly polymers (up to 5 years CIT exemption), and manufacture of paper container coated with bio-plastics (up to 3 years of CIT exemption).
Martin Chrometzka
Associate Partner
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