Tax cuts for electric vehicles

Tax cuts for electric vehicles

A visitor browses an electric vehicle on display at Motor Expo 2021 in Nonthaburi province in November 2021. (Photo: Pattarapong Chatpattarasill)
A visitor browses an electric vehicle on display at Motor Expo 2021 in Nonthaburi province in November 2021. (Photo: Pattarapong Chatpattarasill)

The cabinet on Tuesday approved new excise tax rates for motor vehicles - lower for electric vehicles and higher for oil-fuelled - to promote EV production and use, a government spokesman said.

Thanakorn Wangboonkongchana said the cabinet had also approved a notification from the Finance Ministry to reduce the import duty on completely built electric vehicles by 40% for EVs priced up to 2 million baht and 20% for EV imports priced 2 million to 7 million baht.

The spokesman said new excise tax rates would apply to 27 kinds of vehicles, but six of them would be implemented immediately they are published in the Royal Gazette.

Pickup passenger vehicles (PPVs) that are plug-in hybrid electric vehicles will be subject to an excise tax rate of 10% of their price from the start of the new rates until Dec 31, 2035.

Cars carrying up to 10 passengers that are electric powered will be taxed at 2% until Dec 31, 2025. Afterwards, the rate will be 8% to 10%.

Eco cars will be subject to 14% excise tax until Dec 31, 2023. Afterwards the rate will be 10% to 12% until 2025 depending on engine capacity, carbon dioxide emissions and safety standards.

Double-cab pickup trucks that are plug-in hybrid electric will be subject to 5% excise tax.

Pickup trucks that are electric powered will have 0% excise tax until Dec 31, 2025, and 2% from Jan 1, 2025, to Dec 31, 2035.

Pickup trucks that are fuel cell powered will see 0% excise tax.

New excise tax rates for 21 other types of vehicles would take effect from 2026 to 2035.

Cars with engine capacities up to 3,000cc will be taxed 25-40% in stages from Jan 1, 2026, to Dec 31, 2029. Afterwards the rate will be 13-38%

For cars with bigger engines, the excise tax will be 50% of their value from Jan 1, 2026, onwards.

Mr Thanakorn said import duty on EVs priced up to 2 million baht would fall from 80% to 40%. If the duty is no more than 40% due to a free trade agreement, it will be waived. If FTA import duty is higher than 40% it will be cut by 40%.

For fully built EVs priced 2 million to 7 million baht, the import duty will be reduced from 80% to 60%. If the FTA-based duty is 20% or less, it will be waived. If the FTA duty is more than 20%, it will be cut by 20%.

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