Corporate income tax 2026: getting to know it

For SMEs in Chiang Mai and across the country, understanding corporate income tax is at the heart of managing a business for sustainable growth. Corporate income tax is the tax levied on the net profit of a company or juristic partnership established under the law, which must file and pay tax every year. Careful tax planning not only keeps the business compliant with the law, but can also save unnecessary expense and improve your business's liquidity.

In this article, YMTD Accounting Partner Chiang Mai takes you through corporate income tax for 2026, focusing on 5 deductions that SMEs often overlook, which may be the key to reducing your business's tax burden by more than you would expect.

Why should SMEs pay attention to corporate income tax deductions?

In today's challenging economy, every baht counts. Overlooking even a small tax benefit can mean losing the chance to put that money into developing or expanding the business. Tax deductions are not just a legal mechanism; they are an important tool the government uses to promote investment, create jobs and stimulate the economy in various areas. It is therefore essential for SMEs to understand and use these benefits in full.

  • Better liquidity: Reducing the tax you have to pay leaves the business with more working cash, which can go into necessary investments such as expansion, product or service development, or an emergency reserve
  • Lower operating costs: Some deductible expenses are costs the business already needs to incur. Knowing that they can reduce tax lowers the business's net cost
  • Competitive advantage: A business that manages its tax better is more competitive in the long run
  • A better image: A business that takes legal compliance seriously and uses government measures correctly builds credibility

So studying and understanding corporate income tax and the deductions available for 2026 is not just an obligation; it is an investment in a better future for your business.

Corporate income tax deductions 2026: 5 deductions Chiang Mai SMEs should not overlook

Calculating corporate income tax starts with income, less expenses, less the various deductions, to arrive at taxable net profit. The role of deductions is to reduce the net profit base on which tax is calculated, so the more deductions you can use, the lower the tax burden. Here are the 5 deductions that SMEs often overlook:

1. Staff training and seminar expenses (200% deduction)

Developing people is the key to moving a business forward, especially for SMEs in the digital age. Investing in training to raise staff skills, whether in technology, languages or specialist skills, not only improves productivity but can also be deducted at twice the actual expense under Royal Decree No. 437 of 2005.

  • Why is it overlooked? SMEs often think training is expensive and not worth it, or sometimes do not know that it can be deducted twice over
  • What you should know: To qualify, the training must be run by a licensed educational institution or private skills-training centre, or by a government agency, and must relate to the company's business
  • Example: If an IT SME in Chiang Mai sends staff on an AI course costing 50,000 baht, the company can deduct up to 100,000 baht (50,000 x 2)

2. Wages for employees with disabilities and older employees (200% or 150% deduction)

Supporting the employment of people with disabilities and older people is not only a matter of corporate social responsibility (CSR); it also comes with attractive tax benefits.

  • Employing people with disabilities: If you employ people with disabilities in the proportion required by law (Section 35 of the Persons with Disabilities Empowerment Act of 2007), the company can deduct the wages paid to them at twice the amount
  • Employing older people: Under Royal Decree No. 639 of 2017, a company that employs people aged 60 or over (at no more than 15,000 baht per person per month) can deduct their wages twice over, up to 10% of total staff costs
  • Why is it overlooked? Some businesses do not know the procedure or the exact benefits of employing these groups, or worry about how the organisation would adapt
  • What you should know: The rules and conditions set by the Revenue Department must be followed strictly; study the Revenue Department's notifications directly

3. Depreciation on newly invested assets (extra 25% or 40%)

Investing in new assets such as machinery, equipment or software is essential for an SME to develop and increase its production capacity. The government promotes investment by allowing companies to depreciate certain types of asset faster than normal, or at a higher rate.

  • Depreciation of machinery and equipment: For machinery used to produce goods or services, the company can depreciate the asset faster than normal (40% of the cost on the date of acquisition) under Royal Decree No. 556 of 2013
  • Computer software: Can be depreciated at 40% of the cost on the date of acquisition
  • Why is it overlooked? SMEs usually apply ordinary depreciation, or do not know about the special measures that accelerate the deduction
  • What you should know: The asset must fall within the Revenue Department's notification and be used directly for the business

4. Research and development (R&D) expenses (200-300% deduction)

Innovation is the key to long-term success. Investment in researching and developing new products, services or processes can be deducted at a very high rate, from 2 to 3 times the actual expense depending on the type of research and development (under Royal Decree No. 597 of 2016 and No. 671 of 2018).

  • Why is it overlooked? SMEs often assume R&D is for large companies, or that the process is complicated. In fact, improving a production process or testing new product formulas can also count as R&D
  • What you should know: The expenses must be certified by the relevant agency, such as the National Science and Technology Development Agency (NSTDA) or another authorised government body
  • Example: A restaurant in Chiang Mai that develops new recipes to cut costs and improve production efficiency may qualify as R&D

5. Social and environmental expenses (CSR & Green Initiatives) (150-200% deduction)

Businesses today place more importance on sustainability. Social activities (CSR) or investment in protecting the environment not only build a good image but also earn tax benefits.

  • Charitable donations: In some cases these can be deducted twice over
  • Investment in wastewater/air treatment systems: Buying and installing equipment to control environmental pollution can be depreciated at a special rate, or deducted as an expense twice over in some cases, under Royal Decree No. 11 of 1959 and other green investment promotion measures
  • Why is it overlooked? Businesses tend to see these activities as pure cost and do not consider the hidden tax benefits
  • What you should know: They must meet the criteria set by law and be clearly documented

Using these deductions correctly and in full can reduce your business's corporate income tax significantly. For SMEs looking for a professional Chiang Mai accounting partner, YMTD Accounting Partner is ready to advise and provide a complete service.

Common corporate income tax mistakes SMEs should watch out for

Despite the many tax incentives and deductions available, many SMEs still fall into avoidable traps that lead to paying more tax than necessary, or worse, fines and penalties from the Revenue Department.

  • Lack of knowledge and not keeping up with changes in the law: Tax law is updated constantly. Not following the changes can mean missing new benefits or failing to comply with new rules
  • Incomplete or incorrect documents: Supporting documents for the accounts and tax filings are extremely important. If documents are incomplete, or cannot show where income and expenses came from, the deduction may be refused
  • Not separating personal and business expenses clearly: A classic mistake that causes many problems later. Recording personal expenses as company expenses can lead to a back assessment and penalties
  • Not using the deductions you are entitled to: For many reasons, such as not knowing, not being sure, or thinking it is too complicated, many SMEs neglect deductions they are entitled to
  • Filing tax late or missing the deadline: Filing P.N.D.50 or P.N.D.51 late inevitably means surcharges and fines
  • Not consulting a specialist: Assuming you can handle all the tax yourself without sufficient knowledge can lead to serious mistakes. Consulting an experienced Chiang Mai accounting firm keeps your business safe from errors

Summary: plan your 2026 corporate income tax wisely with YMTD Accounting Partner Chiang Mai

Corporate income tax for 2026 is no longer something distant or hard to understand. For SMEs, understanding and using the available deductions wisely is the key to building a competitive advantage, improving liquidity and leading your business to success.

The 5 deductions above, from staff training, wages for employees with disabilities and older employees, investment in new assets and research and development, to social and environmental activities, are all golden opportunities that SMEs should not overlook. Good tax planning, together with accurate and reliable bookkeeping, helps your business grow steadily and sustainably.

If you own a business in Chiang Mai and want professional advice on tax, planning and bookkeeping, so you can be sure you are using every tax benefit fully and lawfully, YMTD Accounting Partner Chiang Mai is ready to take care of your business.

Contact YMTD Accounting Partner Chiang Mai today so your business can save tax the right way and grow strong!

Tel 081-542-3019 / LINE: @ymtd