Tax Season 2025: Can You Really Deduct Car Insurance from Your Taxes?

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As we approach the end of 2025, the scramble to find tax deductions is on. A common question we hear at Motorist Thailand is: "Can I use my car insurance premium to reduce my personal income tax?"

There is a lot of confusion surrounding this topic, often caused by mixing up "General Insurance" with "Health Insurance." Today, we are setting the record straight so you can plan your finances accurately without any nasty surprises from the Revenue Department.

The Short Answer: No, But There’s a Catch.

For Individual Taxpayers (Personal Income Tax), the general rule is: No. You cannot deduct standard voluntary car insurance premiums (Class 1, 2, 3, etc.) or Compulsory Insurance (CTPL/Por Ror Bor) from your personal income tax.

However, there are two specific exceptions where car-related expenses can help with taxes:

1. If you are a Business Owner (Juristic Person).
2. If your policy includes a specific "Health Insurance" rider.

Let’s break these down.

The Confusion: Why Do People Think It’s Deductible?

The confusion stems from the 25,000 THB General Insurance Deduction rule. Many people see "General Insurance" (Non-Life Insurance) and assume it covers everything. However, the law specifically states that this deduction applies only to Health Insurance premiums paid to non-life insurance companies.

• Car Collision Coverage: Not Deductible
• Car Theft/Fire Coverage: Not Deductible
• Personal Health Rider (attached to car insurance): Deductible (rare, but possible)

Pro Tip: Check your car insurance policy. If it specifically breaks down a premium portion as "Health/Medical Insurance" for the driver, that specific portion might be deductible up to the 25,000 THB limit. However, most standard policies bundle this as "Personal Accident (PA)," which typically does not qualify as a tax-deductible health premium under current strict definitions.

The Good News for Business Owners (Corporate Tax)

If you run a company or a registered partnership, the rules are completely different.

If the car is registered in the Company’s Name and is used for business purposes, 100% of the car insurance premium is treated as a business expense.

• Benefit: This reduces the company’s net profit, thereby reducing Corporate Income Tax.
• Condition: The car must be a company asset, and you must have a valid Tax Invoice (receipt) issued in the company’s name.

For Business Owners: Buying Class 1 insurance for company cars is a smart way to protect assets while legitimately lowering your corporate tax bill.

How to Actually Save Money (Since You Can't Deduct Tax)

Since you likely cannot use car insurance to lower your personal tax, the goal shifts from "Tax Saving" to "Premium Saving."

If you are paying full price for car insurance, you are likely overpaying. Here is how to lower your costs instantly:

1. Name Your Drivers: Instead of an "Any Driver" policy, specify up to 2 drivers. This can lower premiums by up to 20%.
2. Dash Cam Discount: The law requires insurers to give a 5-10% discount if you have a dashboard camera installed.
3. Accept a Deductible (Excess): Agreeing to pay the first 3,000-5,000 THB of a claim can slash your premium significantly.
4. Shop Around: Never auto-renew without checking market rates.

Real Tax Deductions You Should Be Using in 2025

If you need to lower your tax bill before December 31st, focus on these legitimate deductions instead of car insurance:

• Health Insurance: Deductible up to 25,000 THB.
• Life Insurance: Deductible up to 100,000 THB.
• Pension Life Insurance: Deductible up to 200,000 THB (max 15% of income).
• SSF / RMF Funds: Investment funds designed specifically for tax benefits.
• Social Security: Fully deductible.

Summary

While it is disappointing that personal car insurance is not tax-deductible, it remains an essential tool for protecting your finances. A single accident can cost hundreds of thousands of Baht—far more than any small tax saving.

Stop overpaying for insurance. At Motorist Thailand, we help you find the best coverage at the fairest price. We compare quotes from top insurers so you don’t have to.

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