Last year for Thai ESG's 300,000-baht tax deduction
From 2027 the rule goes back to at most 100,000 baht with an 8-year hold. After reading, you can work out how much you could deduct, and you will know that fund cut-offs usually come before the end of the year.
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Picture the night of 30 December. You suddenly remember you have not bought a tax-saving fund yet, so you open your banking app to buy one before the year ends, only to find the fund you wanted stopped taking orders that afternoon. This year that kind of slip costs more than before for people who claim through ThaiESG funds, because the rule that lets them deduct up to 300,000 baht is about to expire.
The rule comes from Ministerial Regulation No. 395 (B.E. 2567), published in the Royal Gazette on 3 December 2024, as iTAX summarised it. ThaiESG units bought from 1 January 2024 to 31 December 2026 can be deducted up to 30% of assessable income and at most 300,000 baht, as long as they are held for at least 5 years. Units bought from 1 January 2027 go back to the earlier rule: a deduction of at most 100,000 baht and an 8-year hold. Unless the government changes the rule before then, 2026 is the last year of the 300,000-baht limit.
ThaiESG funds hold Thai shares and bonds that focus on sustainability
ThaiESG is short for Thailand ESG Fund, a mutual fund that must put at least 80% of its value into Thai shares and bonds that meet environmental, social and governance standards, known as ESG, according to the stock exchange's SET Investnow, which calls 2026 the last year under the current rule.
A point many people still find confusing is that this allowance is separate from the other retirement savings products, RMF, SSF, provident funds and pension insurance, which together can be deducted up to 500,000 baht. Someone who has used that allowance in full still has room for ThaiESG on top. You also do not have to buy every year: you claim in the year you buy.
A deduction does not mean you get back what you paid
A deduction takes this amount off your income before tax is worked out. It does not hand you back the money you put into the fund. Put simply, what you save depends on the tax rate you pay. Take someone whose top slice of net income is taxed at 10%: buying 100,000 baht of ThaiESG cuts their tax by about 10,000 baht. For someone taxed at 20% on that slice, the same amount cuts their tax by about 20,000 baht.
The 30%-of-income cap matters as much as the 300,000-baht figure. Someone with assessable income of 800,000 baht for the year can claim at most 240,000 baht, even if they buy more. And for anyone whose income is below the level where tax is due, a deduction does nothing for their tax, because there is no tax to cut in the first place.
The money is locked in for 5 years, and fund prices can fall
The condition to think hardest about is the 5-year hold, which is counted day for day from the purchase date, not by calendar year. Units bought on 20 December 2026 must be held until 20 December 2031. Sell before then and you lose the deduction and must repay the tax you saved, plus a surcharge under Section 27 of the Revenue Code. The money you put in should be money you will not need for the next 5 years.
The other thing to know before buying is that ThaiESG funds invest in shares and bonds, so their prices rise and fall with the market. What you get back after 5 years may be less than you paid, and the tax saving does not guarantee an overall gain. Funds also invest differently and charge different fees, so read the prospectus of any fund you are considering. This article explains the rules so you can decide for yourself; it is not advice to buy any fund.
Fund cut-offs come before 31 December
Although the rule runs to 31 December 2026, each asset management company sets its own last day and time for orders, and it is often earlier. In 2024, for example, a notice from one fund house selling through ttb took orders for its tax-saving funds until 15.30 on 30 December for payment by transfer, while switches from some of its other funds closed on 19 December.
The same notice points to another step that is easy to miss: investors must tell the fund house that they want to claim the tax deduction for the units they buy, which that firm let people do online. Each fund house may handle this differently, so when you buy, ask at the same time where to notify it and by when, so the deduction you paid for actually counts when you file your tax return early next year.
Check three things before mid-December
If you pay income tax and are thinking of using this allowance, there are three things you can do this week. First, work out what 30% of your income for the year comes to, and what rate your top slice of income is taxed at, so you know how much tax you would really save. Second, ask yourself whether you truly will not need this money for 5 years, and whether you can accept it if the fund's price falls. Third, ask the bank or fund house you would buy through for its last order day and time in 2026, and how to notify it that you are claiming the deduction. Getting this done before mid-December means you will not be racing the clock on the last working day.
FAQ
How much can ThaiESG deduct in 2026?
Up to 30% of assessable income and at most 300,000 baht, for units bought from 1 January 2024 to 31 December 2026.
What changes in 2027?
Units bought from 1 January 2027 go back to the earlier rule: a deduction of at most 100,000 baht and an 8-year hold, unless a change is announced.
How long must I hold the units?
At least 5 years, counted day for day from the purchase date. Sell earlier and you lose the deduction and must repay the tax with a surcharge.
Can I use it alongside RMF and SSF?
Yes. The ThaiESG allowance is separate from the combined 500,000-baht cap for RMF, SSF, provident funds and pension insurance.
