Bangkok--20 Sep--124 Communications Consulting
Thailand BOI today approved a new incentive package to attract foreign business to relocate and expedite large-scale investment. The new package offers benefits including an additional 50% reduction of corporate income tax for a period of 5 years, increased allowance of up to two times the actual training expenses and a 5-year corporate tax exemption for the establishment of human resource development institutions.
Ms. Duangjai Asawachintachit, Secretary General of Thailand Board of Investment (BOI), revealed after the board meeting, chaired by Prime Minister Prayut Chan-ocha, that the board agreed with measures under the "Thailand Plus Package" which was endorsed at the economic ministers meeting on Sept. 6, 2019. The package comprises investment promotion measures in two key areas as follows:
1. Measures to accelerate foreign investment and expedite large-scale projects in targeted industries. An additional 50% reduction of corporate income tax for a period of 5 years will be offered to corporates located outside Bangkok that are eligible for 5-8 year corporate income tax exemption. Applications must be submitted to BOI by the end of 2020 and actual investment must be at least one billion baht and expedited within the year 2021.
2. Measures to develop human resources and build up the high skilled workforce, crucial to investment decisions. This measure aims to encourage corporates to provide training and engage in the education of the future workforce before it enters the employment market. The measures also aim at encouraging corporates to establish professional training/educational institutions in science, technology and engineering (STEM) as per the following details:
2.1 Measures to support training. Investment or expenses related to human resource development can be included in the allowance for corporate tax exemption with no minimum expense condition. Two categories of investment in HR development can benefit from these measures:
Category 1: Corporates will receive additional corporate tax exemption allowance of one time the actual expenses or investment in STEM training of students in Dual Education, Cooperative Education or Work-Integrated Learning programs.
Category 2: Corporates will receive additional corporate tax exemption allowance of two times the actual expenses or investment in providing employee training related to targeted technologies. The training courses must be endorsed by the Ministry of Higher Education, Science, Research and Innovation, or the Easter Economic Corridor Policy Committee for training institutions in EEC.
Applications for these additional incentives must be submitted by the year 2021 and before the end of the project's corporate tax exemption period.
2.2 Measures to support private sector investment in the establishment of human resource development institutions. Corporates (parent companies) in any business not related to educational or training institutions, when investing in the establishment of STEM education or professional training institutions endorsed by the Ministry of Higher Education, Science, Research and Innovation, will be eligible to receive a 5-year corporate tax exemption for 100% of the investment fund used for the establishment of the institution, as for the newly-established institutions they will receive import tax exemption for the machinery. Applications must be submitted by the year 2021 and applicants must be in the sectors under BOI's current investment promotion scheme.
Approval of Chana district of Songkhla province as the fourth model city
The BOI approved Chana district of Songkhla province as the fourth model city, following the policy to promote investment under the Model City Project. The project aims to create cross-border economic linkage to countries such as Malaysia and Singapore and support the industrial development in Thailand's southern provinces. Investors in Chana district will receive the same incentives already granted for investments in the three other model cities, namely Nong Chik district in Pattani province, Betong district in Yala province and Su-ngai Kolok district in Narathiwat province. The investment incentives include a 8-year corporate tax exemption for new projects and 5-year for existing projects, and other special privileges such as a 90% reduction of normal import tax for a period of 10 years for raw materials or necessary materials needed for manufacturing products for the domestic market.