Thailand Introduces 200% Tax Deduction for SME Digital Spending

On 6 February 2026, the Royal Gazette published Royal Decree No. 802 (B.E. 2569). The regulation introduces a 200% corporate income tax deduction for small and medium-sized enterprises that invest in qualifying digital products and services. This regulation came into effect on 7 February 2026 and applies retroactively to expenses incurred from 24 June 2025 until 31 December 2027. For SMEs operating in Thailand, this creates a reduction in tax liability if the business meets the eligibility thresholds and sources its digital spending from approved vendors.

Background and Mechanism

The Thai Cabinet approved the new measure in principle on 24 June 2025, and the Digital Economy Promotion Agency (DEPA), together with the Revenue Department, developed the implementing framework over the following months.

The deduction operates as a 100% corporate income tax exemption on top of the standard expense deduction. This means a qualifying SME can deduct twice the amount of eligible digital spending from its taxable income.  Once as a normal business expense and once as the additional CIT exemption granted by the decree. The combined effect is a 200% deduction, capped at THB 300,000 in additional exemption per accounting period.

Eligibility Criteria

The decree only targets SMEs structured as companies or juristic partnerships. A business must meet two financial thresholds on the last day of its accounting period: paid-up capital not exceeding THB 5 million, and annual revenue from the sale of goods and services not exceeding THB 30 million. Both Thai-owned and foreign-owned entities that satisfy these conditions are eligible.

Two exclusion conditions apply. The business must not be claiming overlapping tax benefits for the same digital expenditure under any other Royal Decree issued under the Revenue Code. Second, the digital products or services in question must not be used in operations that are exempt from corporate income tax under the Investment Promotion Act (BOI), the National Competitiveness Enhancement Act for Targeted Industries, or the Eastern Economic Corridor (EEC) Act. These anti-overlap provisions mean that BOI-promoted companies receiving CIT exemptions or reductions on promoted activities cannot claim the digital deduction on the same spending.

Qualifying Expenditure and the Thailand Digital Catalog

Eligible expenses cover the purchase, development, or subscription of computer software, hardware, smart devices, and digital services. Desktop computers are explicitly excluded. This distinction is intentional as the incentive targets purpose-built digital tools such as point-of-sale systems, cloud-based accounting platforms, inventory management software, and smart sensors, rather than general-purpose computing equipment.

The critical compliance requirement is that all qualifying products and services must be sourced from vendors registered on DEPA’s Thailand Digital Catalog. Launched in 2023, the Catalog is a centralised platform listing digital products and services developed by local providers that have been assessed against quality standards. As of early 2026, over 400 digital products and services are registered on the platform. Purchases from vendors outside the Catalog do not qualify for the additional deduction, regardless of the nature of the product.

Key Parameters at a Glance

Parameter	Details
Decree	Royal Decree No. 802 (B.E. 2569)
Effective Date	7 February 2026
Eligible Period	Expenses incurred 24 June 2025 – 31 December 2027
Benefit	200% CIT deduction (100% normal expense + 100% additional exemption)
Deduction Cap	THB 300,000 (additional exemption)
Capital Threshold	Paid-up capital ≤ THB 5 million
Revenue Threshold	Annual revenue ≤ THB 30 million
Qualifying Items	Software, hardware, smart devices, digital services (excl. desktop computers)
Vendor Requirement	Must be registered on DEPA’s Thailand Digital Catalog
Exclusions	No overlapping CIT benefits under BOI, Targeted Industries Act, or EEC Act

Practical Implications for SMEs

The retroactive coverage period is worth noting. Because the decree applies to expenses incurred from 24 June 2025, businesses that made qualifying digital purchases during the second half of 2025 or early 2026 may be able to claim the additional deduction in their next corporate tax filing, provided the vendor was registered on the Thailand Digital Catalog at the time of purchase, and proper documentation was maintained.

Documentation is central to a successful claim. The Revenue Department requires businesses to retain official tax invoices, proof of payment, and DEPA registration confirmation for each qualifying expense. Detailed implementation guidelines from the Revenue Department Director-General are expected to follow, and businesses should monitor these for any additional procedural requirements.

The decree reflects a broader policy direction of the government. Thailand’s government has been accelerating SME digital adoption through initiatives such as DEPA’s One Tambon, One Digital (OTOD) programme and AI Transformation roadmap. Businesses that engage early with the Digital Catalog may find themselves better positioned as the government expands and refines these support mechanisms.

At BizWings Thailand, our accounting and tax compliance services keep client documentation organised and audit-ready at all times. When new incentives come into effect, businesses with structured records maintained through our real-time bookkeeping are already positioned to claim qualifying expenditure.

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