Expansion to Collateral Categories

10 July 2009

A proposed law intended to expand the categories of permissible collateral used as assets in securing a loan was approved by Cabinet yesterday. The bill will be forwarded for Parliament approval shortly.

At present, debtors are allowed limited categories of collateral, namely their homes, land, or gold. However, the proposed law, introduced by the Finance Minister, will allow for new categories property or rights, such as inventory, raw materials, machinery, claims, or a business.

The proposed law requires that collateral contracts be registered with the Commerce Ministry’s Business Development Department. Creditors may enforce contracts for most categories of property or assets except for businesses used as collateral. In this case, the contract will need to be reviewed by an authority.  

The Finance Minister has also proposed that creditors be entitled to claim full repayment on mortgage defaults through an amendment to the Civil and Commercial Code.

Environmental Tax for Biodegradable Plastics

8 July 2009

A proposal by the National Innovation Agency (NIA) for an environmental tax on oil-based plastics is expected to be submitted to the Finance Ministry later this year for possible implementation by the end of 2010.

The measure is to encourage the use of biodegradable plastics by consumers and increase bioplastics demand in harmony with practices of high-income nations.

Environmental concerns, in addition to the increased cost of oil-based plastics through the implementation of the proposed tax, would make biodegradable plastics more attractive to consumers and manufacturers.

At present, the cost of biodegradable plastics is double or triple that of oil-based plastics, although the entire process from production to waste treatment is about the same according to the NIA Director. 

Based on media sources, the Director further explained that the NIA, in association with the Development of the Environment and Energy Foundation, is studying the possibility of establishing Thailand’s first degradable waste plant.

Tax Deductions for Immovable Property Purchases

3 July 2009

The Ministry of Finance has issued a new regulation allowing for tax deductions of immovable property purchases for residence by natural persons through payment by personal income.  

The immovable property for habitation may comprise a building, a building and land, and a Thailand condominium purchase.

Not more than 300,000 baht of personal income paid for purchasing the immovable property is tax deductible and must be paid between 1 January 2009 to 31 December 2009. Furthermore, ownership of the immovable property must be transferred to the buyer during this period.

The law also requires that buyer of the immovable property retain the immovable property for not less than 3 consecutive years.

This regulation was published in volume 126 of the Government Gazette on 8 April 2009.