Policy for Investment Promotion
To relieve the fiscal burden of the government and to respond to current and future economic situations, the Board of Investment (BOI) prescribes policies for investment promotion as follows:
1. The efficiency and effectiveness of tax privileges given will be enhanced. Privileges will be granted to projects that actually benefit the economy and good governance will be used to manage and supervise the application of tax and duty privileges. Promoted entities will report the operating results of their promoted projects to the BOI for review prior to the application of tax and duty privileges for that year.
2. To promote development of quality and production standards to enhance competitiveness in the world market, every promoted project that has an investment capital of 10 million bath or more (excluding cost of land and working capital) must obtain ISO 9000 certification or similar international certification.
3. Previous conditions on exports and use of local materials are repealed so that the criteria for promotion will be in line with international trade and investment agreements.
4. Special investment promotion will be given to regions or areas with low income and inadequate investment facilities. Maximum tax and duty privileges will be given to these regions or areas.
5. Priority is given to small and medium industries by applying a minimum level of investment capital of 500,000 bath (excluding cost of land and working capital) for activities as per the announcement of the BOI no. 1/2553 and of not less than on million baht (excluding cost of land and working capital) for other activities.
6. Priority is given to agricultural activities and agricultural products, projects related to technological and human resource development, public utilities, infrastructure and basic services, environmental protection and conservation and targeted industries.
Tax incentives
- Exemption/reduction of import duties on machinery.(section 28/29)
- Exemption of import duty on raw or essential materials for use in production for export.(section 36)
- A 50% reduction of the corporate income tax.(section 35(1))
- For Corporate Income Tax computation, double deductions from the costs of transportation, electricity and water supply.(section 35(2))
- Additional 25% deduction of the cost of installation or construction of facilities.(section 35(3))
- Exemption of juristic person’s income tax and dividends.(section 31 and 34)
Non-Tax incentives
- Permit for foreign person to enter the Kingdom for the purpose of studying investment opportunities.(section 24)
- Permit to bring into the Kingdom skilled workers and experts to work in investment promoted activities.(section 25 and 26)
- Permit to own land.(section 27)
- Permit to take out or remit money abroad in foreign currency.(section 37)
Guarantees
- The State will not nationalize the activity of the promoted person. (section 43)
- The State will not undertake a new activity in competition with the promoted person’s. (section 44)
- The State will not monopolize the sale of products similar to the promoted person’s.(section 45)
- The State will not impose price controls on the products of the promoted person’s.(section 46)
- The State will grant permission to export at all times.(section 47)
- The State will not allow any government agency, government organization or state enterprise to import any kind of the product being produced by the promoted person into the Kingdom by granting import duty exemption.(section 48)
Protection
- To charge extra import fees into the Kingdom on products similar to those produced by the promoted person at a rate not exceeding 50 percent of the price of overseas insurance and freight charges, effective for a period of not more than one year. (section 49)
- In the case of where the Board is of the opinion that Section 49 is inadequate for protecting the activity of the promoted person. it will increase the measure by banning the import of products similar to the local productions. (section 50)
- In the case where the promoted person encounters any problem or obstacles in the course of carrying out the promoted activity, the Chairman will have the power to render any appropriate assistance.(section 51)
Disclaimer
Any statements concerning taxation are based upon our understanding of current taxation laws and practices in Thailand which are subject to change. While every effort has been made to offer information that is current, correct and clearly expressed the publisher is not responsible for the results of actions taken on the basis of information contained in this summary, nor for any errors or omissions. Readers are encouraged to seek professional advice concerning specific matters before making any decision.
