TESG Fund (Thailand ESG Fund) or Thai Sustainable Fund is another tax-deductible fund option that focuses on investing in ESG (Environment, Social, and Governance) businesses and the transformation to become an ESG company. TESG and Thai ESG mutual funds were created to promote long-term investment in businesses that focus on sustainability (ESG) in Thailand.
TESG mutual funds must invest only in Thai businesses and must be businesses, assets, stocks or debt instruments related to ESG, including the environment, society and governance (Environmental, Social, and Governance or ESG), such as:
- Stocks listed on the Stock Exchange of Thailand (SET) and the Market for Alternative Investment (mai) that have been selected by the SET as having outstanding environmental (environment) or sustainability (ESG) aspects.
- Stocks listed on the SET and mai that have disclosed greenhouse gas emission data
- Debt instruments that comply with the criteria for offering debt instruments related to sustainability
- A digital token for sustainability-related fundraising that is standardized similar to debt instruments.
Conditions of the Thai Sustainability Mutual Fund
It is a fund that is used for tax deductions, similar to the long-term savings promotion fund SSF and the retirement mutual fund RMF that we, as working people, are probably already familiar with. The TESG fund will be open for sale from December 2023 onwards. But before being interested in investing in this fund, we must understand the following important conditions.
- Must be an individual only. Working people, salaried employees like us are the target group.
- You are entitled to a tax deduction of no more than 30% of your assessable income, but not exceeding 100,000 baht. This means that you can purchase up to no more than 100,000 baht. If it exceeds that amount, you cannot deduct any more.
- In the event that there is an investment in more than one fund, the total amount must not exceed 100,000 baht.
- You must hold investment units in this fund for no less than 8 years from the date of purchase (but not including cases of disability or death, in which case you can sell them).
- There is no minimum and you do not need to buy every year. You can get a tax deduction for that year if you buy in any year.
- Investment units can be purchased from 21 November 2023 to 31 December 2032.
- No tax is payable in the event that the investment units are sold back and profit is made, without having to calculate personal income tax.
Important information : For the investment limit of the Thai Sustainable Mutual Fund, TESG will be an additional tax deduction. It will not be counted together with other retirement savings funds, such as the Long-Term Savings Promotion Fund (SSF), the Provident Fund (RMF), the Provident Fund (PVD), the Government Pension Fund (GPF), the Private School Teachers’ Welfare Fund, and the National Savings Fund (NSF), and pension insurance premiums. Currently, the total tax deduction ceiling is set at no more than 500,000 baht. This means that if we choose to invest in the Thai Sustainable Mutual Fund, we will receive an additional tax deduction of 100,000 baht. When combined with other retirement savings funds, the maximum tax deduction is 600,000 baht.
Who is this fund suitable for?
- Individuals have a net income of more than 150,000 baht, which is in the taxable range, and want to reduce their taxes through investment.
- Suitable for those with a high tax base. The higher the tax base, the more tax savings you will receive. You want additional tax deductions in addition to those invested in SSF and RMF and other retirement savings funds that have been used up to the full 500,000 baht.
For example, if we buy TESG investment units at the highest amount of 100,000 baht each
- An individual with a tax base of 5% will save only 5,000 baht in taxes (5% x 100,000).
- An individual with a tax base of 10% saves 10,000 baht in taxes (10% x 100,000).
- An individual with a tax base of 20% (20% x 100,000) saves 20,000 baht in taxes.
- Individuals with a tax base of 35% will save up to 35,000 baht in taxes.
Therefore, TESG mutual funds or Thai Sustainable Funds are an interesting alternative that can directly reduce the tax burden of investors and indirectly support the development of ESG businesses in Thailand.
Always do your research and consult with a financial professional before making any investment decisions.
Reference:
TESG Funds Tax Deductions and Get to Know the New Tax Deduction Fund ‘Thai ESG’
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