Additional Investment Policies
1. Investment Promotion Policy for Sustainable Development
To promote sustainable development, enhance the country’s competitiveness in science and technology, encourage the improvement of manufacturing quality as well as reduce environmental impact, the Board of Investment offers special tax incentives under the Investment Policy for Sustainable Development campaign. (Please see the Board of Investment Announcement No. 2/2553 dated April 23, 2010 for further details.)
1. Investment promotion measures for target industries
Incentives
• Import duty exemption on machinery
• Eight-year corporate income tax exemption without being subject to a corporate income tax exemption cap
• Fifty percent reduction of corporate income tax on net profit for five years after expiry of tax holiday
• Double deduction of transportation, electricity and water supply costs for ten years from the date of income derivation from promoted project
• Twenty five percent deduction of the cost of installation or construction of facilities in addition to normal depreciation deduction
Conditions
• Projects can be located anywhere except Bangkok
• Applications must be submitted to the OBOI by December 31, 2012
• Projects must be in the following activities:

1) Activities related to energy conservation and alternative energy
Category 1.18 Manufacture of alcohol or fuel from agricultural products, including scrap, garbage and/or waste
Category 4.2.3 Manufacture of energy-conserving machinery or equipment machinery or equipment which uses alternative energy
Category 4.15 Manufacture of fuel cells
Category 7.1.1 Production of electricity or steam power
- For cases that use alternative energy, such as energy agricultural material, biogas and wind energy
2) Activities related to eco-friendly materials and products
Category 6.3 Manufacture of eco-friendly chemicals
Category 6.4 Manufacture of eco-friendly products
3) High-technology businesses
Category 1.11.10 Manufacture of medical food
Category 2.5.3 Manufacture of advanced ceramics
Category 2.19 Manufacture of nano materials or products from manufactured nano materials
Category 3.1.1 Manufacture of natural or synthetic fibers
- only manufacture of functional fiber
Category 3.9 Manufacture of medical equipment
Category 3.10 Manufacture of scientific equipment
Category 4.2.1 Manufacture of machinery, equipment and parts that have engineering design
Category 4.2.2 Manufacture of Manufacture of farm machinery or equipment and food processing machinery or equipment
Category 4.2.4 Manufacture or repair of mould and die
- only manufacture of mould and die
Category 4.9 Manufacture, repair or conversion of aircraft, including aircraft parts and equipment or onboard equipment
Category 4.10 Manufacture of vehicle parts
- Automatic Transmissions
- Continuously Variable Transmissions (CVT)
- Traction motors for automobiles; e.g., hybrid or fuel cell cars
- Electronic Stability Control (ESC)
- Regenerative Braking Systems
- Rubber tires for vehicles
Category 5.4.3 Manufacture of industrial electronics
Category 5.4.4 Manufacture of telecommunication equipment
Category 5.5.1 Manufacture of semiconductors
Category 5.5.2 Manufacture of memory storage equipment
- only manufacture of Hard Disk Drive(HDD), Solid State Drive (SSD) and HDD and SSD parts
Category 5.5.4 Manufacture of parts for telecommunication equipment
Category 5.5.5 Manufacture of parts for medical electronics
Category 5.5.6 Manufacture of parts for agricultural electronics
Category 5.5.7 Manufacture of electronic parts for vehicles
Category 5.5.10 Manufacture of solar cells and raw materials for solar cells
Category 5.5.12 Manufacture of flat panel display
Category 5.6 Manufacture of material for microelectronics
Category 5.7 Electronic design
Category 7.18 Human resource development
Category 7.19 Biotechnology
Category 7.20 Research and development
Category 7.21 Scientific laboratories
Category 7.22 Calibration services
2. Measure to promote energy conservation, alternative energy utilization or reduction of environmental impacts
This measure focuses on upgrading the machinery and improving technology to save energy and reduce environmental impacts.
Incentives
• Exemption of import duty for machinery
• Three-year corporate income tax exemption on the revenue of existing projects, accounting for 70% of the investment under this measure excluding cost of land and working capital. The corporate tax exemption period will start from the date of income derivation after the issuance of promotion certificate.
Conditions
• This measure applies to both BOI and Non-BOI promoted existing projects under activities that are eligible for investment promotion.
• BOI-Promoted projects can also apply for this measure when the tax exemption or reduction period expires, or in case the projects do not receive the corporate income tax exemption.
• The applicant must submit investment plan for machinery change to save energy, to introduce alternative energy into the project, or to reduce environmental effects by implementing one of the following:

1) Investment in upgrading the machinery to modern technology that reduces energy consumption at the stipulated ratio.
2) Investment in upgrading the machinery in order to use alternative energy at the stipulated ratio to the total energy consumption.
3) Investment in upgrading the machinery to reduce environmental impact, namely reducing waste, waste water or exhaust air according to the stipulated criteria.
• Application shall be submitted to the OBOI within December 31, 2012 and must complete the implementation within three years from the date of promotion certificate issuance.
• Application for investment promotion under this measure by existing projects of all investment sizes shall be considered by the Office of the Board of Investment.

3. Measure to promote production efficiency improvement by technology upgrade for manufacturing of new products
This measure aims to encourage investors to make efficient use of their machinery as well as to be able to expand to a higher value product line while increasing revenue and maintaining employment.
Incentives
• Exemption of import duty on machinery regardless of zone
• Three-year corporate income tax exemption on revenue derived from the production of new product, not exceeding 100% of the investment in upgrading the production line
Conditions
• This measure applies to both BOI and Non-BOI promoted existing projects.
• Investors must invest in upgrading the existing production line to be able to manufacture new product.
• The new product manufactured from the upgraded line must differ from existing product and have distinct name. The new product must also be in the list eligible for the investment promotion with corporate income tax exemption privilege.
• The upgrading of production line does not include the upgrading of assembly line.
• The application along with investment plan on technology upgrade for the manufacturing of new product must be submitted to the OBOI within December 31, 2012.
• Application for investment promotion under this measure by existing projects of all investment sizes shall be considered by the Office of the Board of Investment.

4. Measure to solve environmental problems
This measure is designed to promote and encourage industrial plants to give priority to the environmental management.
Incentives
• Exemption from import duty on machinery for machinery improvement to reduce the environmental impact.
• Three-year corporate income tax exemption on the revenue of existing projects, accounting for 70% of the investment value of the improvement under this measure excluding cost of land and working capital. The corporate tax exemption period will start from the date of income derivation after the issuance of promotion certificate.
Conditions
• Applicants must comply with the environmental management criteria and conditions specified by the government with pollutant values less than the legal control rate and must be in the following industries:

- Oil refinery
- Natural gas separation
- Power generation
- Chemicals and petrochemicals
- Minerals and base metals
• This measure applies to both BOI and Non-BOI promoted existing projects.
• Projects must reduce their environmental impact according to criteria and methods specified by the Office of Board of Investment.
• Applicants must submit the application including a plan to reduce environmental impact according to the criteria and methods specified by the Office of Board of Investment by December 31, 2012 and complete the implementation within 3 years from the date of promotion certificate issuance.
• Application for investment promotion under this measure by existing projects of all investment sizes shall be considered by the Office of the Board of Investment.

 

Policies 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 manager 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 baht or more (excluding cost of land and working capital) must obtain ISO 9000, ISO 14000 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.         The minimum  capital investment requirement of each promoted activity is 1 million baht (excluding cost of land and working capital).
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.


Source: A Guide to the BOI
Last Updated: September 2012

 

Additional Investment Policies

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