Thailand to accelerate investment incentives, will promote digital adoption
BANGKOK - Thailand's Board of Investment (BOI) has approved new measures to help accelerate investment and to promote adoption of digital technologies. Lawyers Baker & McKenzie summarise the new incentives as follows:
Large investment projects: The BOI offers a corporate income tax reduction of 50% for a period of 5 years from the expiry of the normal corporate income tax exemption period (which is normally 3-8 years from the time the promoted project first generates income).
A key condition is there must be an actual investment of at least THB 1 billion within 12 months after being issued with the BOI promotion certificate.
Applications are accepted from January 4, 2021 until the last business day of 2021.
Digital upgrade: Additional incentives, including three years of corporate income tax exemption from the time the promoted project first generates income, will be granted to existing companies in order to promote the use of digital technology to improve efficiencies, increase competitiveness and stimulate domestic demand.
Existing businesses that apply for investment promotion under the digital technology adoption programme in systems and activities, such as software integration, use of AI, machine learning or big data analytics, will be granted a corporate income tax exemption for three years on their existing businesses in an amount not exceeding 50% of investment value.
Applications must be made by the last business day of 2022.
Genomic Medicine Special Promotion Zone: The BOI has agreed to establish a Genomic Medicine Promotion Area in Burapha University.
The privileges to be granted to businesses located in this area will be the same as those located in the Eastern Aviation City, the Eastern Economic Corridor Innovation Zone (EECi), the Digital Industry Promotion and Innovation Zone (EECd) and the Thammasat Comprehensive Medical Centre (Pattaya) (EECmd), that is, a business that receives a corporate income tax exemption for 5-8 years or more will receive an additional 50% corporate income tax reduction for another two years from the expiry of the corporate income tax exemption period.
If the business is one of the targeted industries, which is entitled to 10 years tax exemption, it will be entitled to an additional one year of corporate income tax exemption from the BOI.
SEZ and southern border provinces: BOI incentives for investment in SEZ Special Economic Development Zones in 10 provinces have been extended for another two years until the last business day of 2022.
The 10 provinces include Kanchanaburi, Trat, and Sa Kaeo, and there are over 300 types of eligible businesses. Businesses in 14 target groups, such as agriculture, medical equipment and plastics, will receive the privileges of 8 years corporate income tax exemption from the time the promoted project first generates income and 50% corporate income tax reduction for five years from the expiry of the corporate income tax exemption period.
BOI incentives in five southern provinces (including Yala, Pattani and Narathiwat) have also been extended for another two years (2021-2022).
Applications are accepted until the last business day of 2022.