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Thailand: Green Corporate Tax Incentive

(Dec. 16, 2010) Thailand's Cabinet on November 9, 2010, approved the issuance of a royal decree that exempts companies from the payment of corporate tax on income derived from the sale of Certified Emission Reduction Credits (CERs) and Verified Emission Reductions (VERs). The exemption will apply for three consecutive years, beginning with the first accounting year in which a given project receives a letter of approval from the Thailand Greenhouse Gas Management Organization (a public organization) (TGGMO) to trade in CERs or upon certification by the Clean Development Mechanism Executive Board (CDMEB) of the United Nations. The project must have a letter of approval from the TGGMO or register with the CDMEB by the end of 2012 in order to qualify for the tax incentives. (Rachanee Prasongprasit, Cabinet Approves Tax Incentives for Green Projects, TNS ONLINE (Dec. 14, 2010),; About TGO, TGGMO website,
(last visited Dec. 17, 2010).)The corporate tax exemption for carbon-credit trades was initially approved by Thailand's Board of Investment on November 16, 2009, with a view to encouraging investment in emission projects under the CDM scheme. The incentive removes the requirement from developers of CDM projects to pay the standard 30% rate of corporate income tax and “puts Thailand on a par with other Southeast Asian countries, which offer similar incentives for investments in CDM projects.” (Yvonne Chan, Thailand to Offer Tax Break on Revenue from Carbon Credit Trades, BUSINESS GREEN (Nov. 17, 2009),
.) Thailand only had 91 registered CDM projects underway in 2009 and, according to the TGGMO, ranks fourth among Southeast Asian nations in terms of registered CDM projects, trailing Malaysia, the Philippines, and Indonesia. (Id.)