Solar Depreciation & Tax Deduction for Thai Factories: 1.5x Write-Off Guide
1.5x Tax Deduction · Save 1-6M THB · Stackable with BOI
Complete guide: depreciation calculation, Revenue Dept documents, BOI stacking, CapEx/PPA/Lease comparison, tax filing timeline.
Royal Decree 805 (effective March 2026) allows factories installing solar PV to claim a 1.5x accelerated depreciation deduction in the first year. A 500 kWp system costing 12.5M THB can deduct 18.75M THB, saving approximately 1.25M THB in corporate income tax (CIT) at the 20% rate. This benefit stacks with BOI under certain conditions and is available only to system owners (CapEx), not PPA users.
What is Royal Decree 805 — 1.5x Expense Deduction for Factory Solar
Royal Decree 805 (effective March 2026) is the Thai government's renewable energy investment incentive. It allows corporate entities that invest in factory solar PV installations to deduct 1.5 times the actual investment cost as an expense for corporate income tax (CIT) purposes.
Normally, solar PV is a fixed asset depreciated on a straight-line basis over a 20-year useful life (5% per year). Royal Decree 805 provides a special benefit: an additional 50% deduction of the investment value in the first year, totaling 1.5x the investment as deductible expense.
Simple example: A 500 kWp system costing 12.5M THB. Normal first-year depreciation = 625,000 THB (5%). With Royal Decree 805: deduct 6,875,000 THB (625K + 6.25M bonus). CIT savings at 20% rate = 1,375,000 THB.
Eligible: Thai-registered corporate entities that own solar PV systems (CapEx purchase) installed on their own factory/commercial building premises.
Read Thailand Solar Legal FrameworkSolar Depreciation Calculation — Real Examples for 500 kWp and 1 MWp Systems
Depreciation is calculated using the straight-line method based on the Revenue Department's standard useful life. Solar PV systems are classified as machinery with a 20-year useful life.
Comparison Table: Normal vs 1.5x Depreciation
| System Size | Cost (M THB) | Normal Year 1 | 1.5x Year 1 | CIT Savings |
|---|---|---|---|---|
| 300 kWp | 7.5 | 375,000 | 4,125,000 | 750,000 |
| 500 kWp | 12.5 | 625,000 | 6,875,000 | 1,250,000 |
| 1 MWp | 22 | 1,100,000 | 12,100,000 | 2,200,000 |
| 3 MWp | 60 | 3,000,000 | 33,000,000 | 6,000,000 |
* CIT savings calculated at 20% corporate tax rate | 1.5x depreciation = normal depreciation + 50% bonus of cost
Detailed Factory Solar ROI CalculatorRevenue Department Requirements — 4 Steps to Claim 1.5x Tax Deduction
Step 1: Obtain e-Tax Invoice from Installer
Obtain e-Tax Invoice from EPC/supplier with tax ID, system specifications (kWp, panel count, inverter details), and itemized pricing (equipment, installation, engineering).
Step 2: Obtain Equipment Quality Certificate
Prepare equipment quality certificates from authorized bodies: TIS (Thai Industrial Standards) for solar panels, IEC certification for inverters, and a Certificate of Completion from the supervising engineer.
Step 3: Record Asset in Company Books
Record the solar PV system as a fixed asset under machinery & equipment. Specify the Commercial Operation Date (COD), total cost, depreciation method (straight-line, 20 years), along with installation photos and insurance policy as evidence.
Step 4: File Annual CIT Return with Supporting Documents
File PND 50 (annual CIT return) within 150 days of fiscal year end. Declare normal depreciation + 50% bonus under Royal Decree 805 in the tax expense section. Attach all documents from Steps 1-3.
Can You Stack BOI + Royal Decree 805? — Key Limitations
Short answer: Yes, but with conditions. BOI provides corporate income tax (CIT) holidays up to 8 years. During this tax-free period, there is no CIT liability, so depreciation deductions provide no benefit.
After BOI Holiday ends: remaining depreciation (including 1.5x bonus) can be used. Companies with both BOI-promoted and non-promoted activities can split income/expenses, applying the 1.5x deduction to the non-BOI-promoted portion.
Important: No double-dipping. The same expense cannot be deducted under both BOI and Royal Decree 805. You must allocate each expense portion to either scheme.
CapEx vs PPA vs Lease — Who Can Claim the 1.5x Deduction
| Model | System Owner | 1.5x Eligible | Cash Flow Impact | Best For |
|---|---|---|---|---|
| CapEx (Self-invest) | Factory | Full | High upfront, large tax savings | Profitable factories seeking tax reduction |
| PPA (Buy power) | PPA Provider | No | No investment, 10-30% bill reduction | Cash-constrained factories |
| Finance Lease | Factory (accounting) | Yes | Installment + tax savings | Want both tax benefits and spread investment |
| Operating Lease | Lessor | No | Rental as operating expense | Want off-balance-sheet |
Tax Filing Timeline — From Installation to Tax Benefit
Month 0: System COD
Month 1-2: Collect all documents
Month 3: Record in books
Fiscal year end: Calculate depreciation + bonus
150 days: File PND 50
30-60 days after filing: Receive tax credit/refund
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