APAC Tax Matters: 12th edition
At a glance
- New investment promotion policy to be effective by mid 2013
Update on Thailand’s investment promotion policy
The Board of Investment (BOI), a Thai government agency established to promote and encourage investment in Thailand, recently proposed a new investment promotion policy to be effective by mid of 2013.
Under the BOI scheme, the promoted person will be granted tax and non-tax incentives, e.g., exemption from corporate income tax (with no cap, or a cap equal to the cost of investment) for a certain period e.g., 3-8 years, exemption/reduction of import duties on machinery, permission to own land (in case of foreign investors) etc.
Previously, BOI zoning and government policy were used as criteria in determining which incentives to grant. Different investment zones were granted different incentives, the less developed the area, the greater the incentives which were granted.
In future, industry-based investments rather than zone-based investments will be used as criteria for determining which incentives to grant. In arriving at the relevant incentives, consideration will be given to current government policy, benefits to the country, and global trends such as Thailand’s entry into the ASEAN Economic Community (AEC) in 2015.
Accordingly, the number of promoted activities is expected to be reduced from more than 200 to about 100. In this respect, the new criteria will give priority to industries related to creativity, environmentally friendly practices, value-add, alternative energy, bio-technology, health care, logistics and research and development.