BOI Thailand - Tax and Non-Tax Incentives - Merit Based Incentives - Activity Based Incentives - Requirements & Procedure

Activity Based Incentives - Merit Based Incentives
BOI Thailand

BOI Thailand Incentives According to Business Activities


The Board of Investment - BOI Thailand classifies 2 types of incentives according to business activities for the investors who wish to invest in Thailand, activity based incentives and merit based incentives.

Activity Based Incentives


Activity based incentives fall into two (2) group types

GROUP A

A1 Knowledge-based activities focusing on R&D and design to enhance the country’s competitiveness.

  • Exemption of corporate: 8-year CIT exemption (without cap) + Merit based incentives
  • Exemption of import duties on machinery
  • Exemption of import duties on raw materials for use in production for export
  • Non-tax incentives

A2 Activities in infrastructure for the country’s development, activities using advanced technology to create value – added, with no or very few existing investments in Thailand

  • Exemption of corporate: 8-year CIT exemption (without cap) + Merit based incentives
  • Exemption of import duties on machinery
  • Exemption of import duties on raw materials for use in production for export
  • Non-tax incentives

A3 High technology activities which are important to the country’s development, with a few investments already existing in Thailand

  • Exemption of corporate income tax: 5-year CIT exemption + Merit based incentives
  • Exemption of import duties on machinery
  • Exemption of import duties on raw materials for use in production for export
  • Non-tax incentives

A4 High technology activities which are important to the country’s development, with a few investments already existing in Thailand

  • Exemption of corporate income tax: 3-year CIT exemption + Merit based incentives
  • Exemption of import duties on machinery
  • Exemption of import duties on raw materials for use in production for export
  • Non-tax incentives

GROUP B

B1 Supporting industry that does not use high technology, but is still important to the value chain

  • Exemption of corporate income tax: granted additional incentives for merit on competitiveness enhancement and decentralization (for some activities)
  • Exemption of import duties on machinery
  • Exemption of import duties on raw materials for use in production for export
  • Non-tax incentives

Merit Based Incentives


According to the BOI Thailand - Merit based incentives are the additional incentives which are granted to stimulate foreign investment or spending on activity that benefit the country or industry at large. For this reason, board specifies additional incentives based on the merits or the project, as follow:

Merit on Competitiveness Enhancement

In case there is many investment or expenditure on competitiveness enhancement, the following in investment capital and expenditure will be counted:

  • 300% of the additional capital in Research, technology Development and Innovation: In-house, outsourced in Thailand or joint R&D with oversea institutes.
  • 100% of the additional capital in Donations to technology and human resource development funds, education institutes, specialize training centers, R&D institutes or governmental agencies in the S&T field in Thailand as approved by the board.
  • 200% of additional capital in IP acquisition/licensing fees commercializing technology developed in Thailand.
  • 200% of additional capital in advanced technology training.
  • 200% of additional capital in development of local suppliers with at least 51% Tai shareholding in advanced technology training and technical assistance.
  • 200% of additional capital in product and packing design: In-house or outsourced in Thailand, as approved by the board

Additional CIT incentives will be granted depending on investment/expenditure ratio (%) to combined revenue of the first 3 years

  • 31 year: 1% or not less than 200 Million Baht
  • 2 years: 2% or not less than 400 Million Baht
  • 3 years: 3% or not less than 600 Million Baht

Merit on Decentralization


Projects located in 20 provinces with lowest per capita income – Kalasin, Chiayaphum, Nakhon Phanom, Nan, Bueng Kan, Buri Ram, Phrae, Maha Sarakham, Mukdahan, Mae Hong Son, Yasothon, Roi Et, Si Sa Ket, Sakhon Nakhon, Sa Kaew, Sukkhothai, Surin, Nong Bua Lamphu, Ubon Rachatani and Amnatchroen (excluding border provinces in Southern Thailand and Special Economic Development Zones which separate special incentive packages) – will receive additional incentives, as follow:

Three additional of corporate income tax exemption shall be granted. Projects with activities in Group A1 and A2 which are already granted an 8-year corporate income tax exemption shall instead receive a 50% reduction of corporate income tax on net profit derived from promoted activity for 5 years after the corporate income tax exemption period expires.

Activity based corporate income tax exemption

  • A1: 8 years (no cap)
  • A2: 8 years
  • A3: 5 years
  • A4: 3 years
  • B1: Not Eligible
  • B2: Not Eligible

Additional corporate income tax exemption

  • A1: Not Eligible
  • A2: Not Eligible
  • A3: 3 years
  • A4: 3 years
  • B1: 3 years
  • B2: Not Eligible

Total of CIT exemption period

  • A1: 8 years (no cap)
  • A2: 8 years
  • A3: 8 years
  • A4: 6 years
  • B1: 3 years
  • B2: Not Eligible

Merit on Industrial Area Development


Projects located within industrial estates or promoted industrial zones shall be additional year of corporate income tax exemption.

Activity based corporate income tax exemption

  • A1: 8 years (no cap)
  • A2: 8 years
  • A3: 5 years
  • A4: 3 years
  • B1: Not Eligible
  • B2: Not Eligible

Additional corporate income tax exemption

  • A1: Not Eligible
  • A2: Not Eligible
  • A3: 1 years
  • A4: 1 years
  • B1: Not Eligible
  • B2: Not Eligible

Total of CIT exemption period

  • A1: 8 years (no cap)
  • A2: 8 years
  • A3: 6 years
  • A4: 4 years
  • B1: Not Eligible
  • B2: Not Eligible

Applying for merit based incentives


Applications can choose to apply for one type or for many types of merit based incentives, but applications must be submitted in accordance with the prescribed criteria.

Projects entitled to CIT exemptions (A1-A4)

  • Applicants who would like to be granted for merit based incentives have to submit a Competitiveness Enhancement from with approval form. Applicants can submit additional application after the first submission.
  • Applicants can submit additional application only if they are exempted for corporate income tax under section 31, either time period or capital left for tax exemption

Projects not entitled to CIT exemption (B1-B2)

Applicants who would like to be granted for Merit-based incentives have to submit a Competitiveness Enhancement form with approval form only.

Additional explanatory for merit-based granting under expenditure for donations to technology and human resource development funds, as follows:

  • Applicants have to submit an approval supporting plan from NSTDA Academy*. The process must be finished before an expiration of corporate income tax incentive granted by normal criteria.
  • Applicants have to submit an approval supporting plan from NSTDA Academy*. The process must be finished within one year, starting from the first day that companies generated revenues.
  • For the consideration of expenditures for donations to technology and human resource development funds, the expenditures shall be compared with the total revenue of the promoted project only. If actual expenditure is higher than expected expenditure, applicants will be granted for another year, starting from an ending of the third-year activity. On the other hand, if actual expenditure is less than expected expenditure, applicants will not be allowed to redeem for supporting funds.

*Applications who would like to be granted under the conditions have to submit an intention from granting under expenditure for donations to technology and human resource development funds to NSTDA Academy. Applications have to submit an intention form with approval from after being approved by NSTDA Academy.

Incentives for production efficiency improvement


In order to improve production efficiency and develop competitiveness, the Board grants promoted projects an exemption on import duty for the following machinery, as long as the project is promoted:

  • Machinery used for research and development
  • Machinery used for pollution prevention or treatment
  • Machinery used in promoted projects that manufacture electronic products and parts for improving or replacing existing machinery or for increasing production capacity in existing projects, regardless of whether the projects have started their full operation or not.

Juslaws & Consult

Juslaws & Consult can provide you with all the details related to the benefits of the BOI Thailand promotion and all incentives it has to offer, so please do not hesitate to contact us.

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