Thailand's Revenue Department is holding a public consultation on the principles of the draft Act on Qualified Refundable Tax Credits from 6 October to 5 November 2026. The credits could be used to pay tax, and any balance remaining after three years could be refunded in cash. The draft is seen as supporting legislation to respond to the global minimum tax and update the form of investment incentives.
Why the Law Is Being Proposed
The consultation document (in Thai and English) explains that the way large multinational groups are taxed worldwide is changing, and traditional investment incentives such as tax exemptions and reductions are becoming less effective, so new forms of incentive are needed. Qualified Refundable Tax Credits (QRTC) are a form of incentive recognized by the OECD. The draft was developed jointly by the Revenue Department and the Board of Investment (BOI), with the Revenue Department as the competent authority.
Key Principles
Use: credits may be used to pay income tax or other taxes specified by Royal Decree.
Term: certificates are valid for 4 years from the date of approval by the approval committee; once 3 years have passed from the start date of the incentive, the remaining balance may be refunded in cash or cash equivalents.
Funding: funds are set aside from corporate income tax revenue net of withholding tax, at no more than 1%.
Eligibility: eligibility, qualifying expenditure or activities, and the credit rate or amount will be set separately by Royal Decree.
Approval: an approval committee chaired by the Director-General of the Revenue Department will set the annual policy and overall ceiling, and approve, amend or revoke credits; once approved, the Director-General issues an electronic certificate.
Transfer: certificates are transferable, with the transferee taking over the remaining credit and remaining term.
Recovery and penalties: where a holder loses eligibility, breaches the rules or fails to cooperate with inspections, the incentive may be amended or revoked and amounts already used or refunded recovered with interest; criminal penalties apply to refusing to provide documents, making false statements or obtaining the incentive by fraud.
Who Will Be Affected
The consultation document lists affected parties including Thai and foreign companies and juristic partnerships, as well as the Fiscal Policy Office, the BOI, the Eastern Economic Corridor Office, the Thai Chamber of Commerce, the Federation of Thai Industries and foreign chambers of commerce. Comments can be submitted via the Revenue Department website or an online form.
This is only a consultation on the principles of the draft. The specific scope and credit rates will depend on the Royal Decree, and the final content is subject to the outcome of the legislative process.
Key Points
The consultation runs from 6 October to 5 November 2026; the Revenue Department posted the notice on its homepage on 14 October.
Credits can offset tax, certificates are valid for 4 years, balances can be refunded in cash after 3 years, and certificates are transferable.
Funding comes from corporate income tax revenue, at no more than 1%.
Eligible parties, qualifying activities and credit rates will be set by Royal Decree.
Recovery, interest and criminal penalties are provided for.
Z&X Insight
For multinational groups with consolidated revenue of EUR 750 million or more that enjoy BOI tax exemptions in Thailand, the low effective tax rate resulting from those exemptions may trigger top-up tax under Pillar Two, and this consultation is precisely about adjusting the form of incentives. Affected groups can use the consultation period to calculate the effective tax rate of their Thai entities and watch for the subsequent Royal Decree. Z&X Global Minimum Tax (Pillar Two) services calculate effective tax rates and top-up tax, and track Thailand's implementing rules.
Sources
One on one exclusive financial and tax consultation
