Legislation—the Investment Promotion Act (No. 4), administered by the Board of Investment (BOI)—was recently issued to amend certain provisions that were effective 25 January 2017. The amendments are aimed at encouraging continued investment in Thailand.
Among amendments for the investment incentives are proposals that include:
Under the legislation, if the BOI were to find that a corporate income tax exemption would be inappropriate for a “promoted company,” the BOI could alternatively allow: (1) a 50% corporate income tax reduction for up to 10 years; and (2) the right to claim a tax deduction of no more than 70% of the total investment capital within 10 years from the year in which revenue is first generated (this would be in addition to normal depreciation).
In addition to the above amendments, it is expected that new legislation could be issued to provide an opportunity to obtain investment privileges for businesses that may not otherwise qualify under the existing prescribed categories of promoted businesses under the Investment Promotion Act. At this stage there is no definite information on the target industries, criteria for qualification, framework for the new legislation or how it would operate.
Businesses considering making a new investment need to understand how these new rules may apply so as to benefit from the tax and non-tax incentives. Entities that have applied to the BOI for an investment promotion and have an application is currently in progress may want to liaise with the BOI to determine whether any tax benefits and privileges are maximized under the new rules.
Read a February 2017 report prepared by the KPMG member firm in Thailand
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