Thai Government Introduces Double Tax Deduction Window on Hotel Renovations to Boost Tourism Sector

The Royal Decree No. 800, published in the gazette on the 29th of December 2025, grants a 100% income tax exemption for hotel renovation and improvement expenses. This provides hotel operators and foreign hospitality investors with a short strategic window to invest and upgrade assets until the 31st of March 2026.

This measure is a component of Thailand´s broader tourism stimulus package designed to accelerate private sector investment in hospitality infrastructure. Thailand is facing headwinds related to its tourism industry with a slowing domestic demand and an uneven international visitor recovery, especially amongst Chinese tourists. For hospitality investors, this tax deduction creates a time-limited opportunity to increase asset value while reducing tax liabilities. Eligibility for the tax deduction requires strict compliance requirements that demand careful planning.

Tax Deduction Structure and Eligibility Criteria

The Royal Decree allows companies and juristic partnerships operating hotels under the Hotel Act to exempt income equal to 100% of expenses paid for additions, alterations, expansions, or improvements to business-related assets. This however, excludes routine repairing expenses. 

The incentive runs retroactively from expenses incurred between 29 October 2026 and 31 March 2026. Expenses must be incurred and not merely contracted within this window to qualify. Payments conducted after the deadline of 31 March 2026 will not benefit from the double deduction.

The exemption operates as a double deduction mechanism:

First 100%: Standard depreciation deduction under Section 65 bis (2) of the Revenue Code

Second 100%: Additional deduction amortized in equal amounts over the accounting periods, beginning when depreciation commences

The Revenue Code permits the deduction only for permanent buildings used in hotel operations and permanently attached fixtures or furnishings. This definitional clarity is important as it excludes routine maintenance, repairs, or furnishings that are not permanently fixed. 

The Royal Decree explicitly disqualifies the following cases: 

• Assets receiving tax benefits under any other Royal Decree, in whole or in part

• Businesses with existing exemptions under the Enhancing National Competitiveness Act, Investment Promotion for Targeted Industries Act, or Eastern Economic Corridor law​

These restrictions mean hotels already benefiting from Board of Investment (BOI) incentives cannot compound benefits under this Decree.

Recommendations for Foreign Hospitality Companies 

Eligible companies that wish to take advantage of this incentive must prepare a detailed investment project and payment plan and notify the Director-General of the Revenue Department according to prescribed criteria, methods, conditions, and timeframes. The Ministry of Finance is expected to specify exactly which documentation requirements will be needed. 

1 - Conduct an Immediate Eligibility Assessment: Audit current tax incentive status and confirm no overlapping benefits, classify pending capital expenditures into repairs (excluded) and improvements (eligible), review asset registers to identify permanent buildings and fixtures qualifying for the exemption.

2 - Accelerate Project Planning and Execution: Fast-track project plans and supplier contracts to meet the 31 March 2026 deadline.

Overall, the Royal Decree No. 800 delivers a time-sensitive opportunity for foreign hotel investors to upgrade Thai assets while securing substantial tax benefits. The measure’s success depends on rapid execution within the five-month window and meticulous compliance with the complex eligibility criteria. 

Our expert accountants at BizWings Thailand make your Thai compliance with the Revenue Department clear and simple. Contact us to get started with Thai accounting and taxation compliance at contact@bizwings.co.