Tax Minimization in Thailand

Updated on Monday 25th July 2016

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The taxation incentives in Thailand are offered to foreign investors by the Board of Investment (BOI) of Thailand. These incentives are offered as a form of encouraging foreign investments depending on the group categorization for their types of activities, as well as on other factors.
 

Tax incentives in Thailand


According to the BOI, tax incentives in Thailand imply that certain tax incentives are granted to foreign investments depending on the group categorization for the activity, as well as additional ones which can be available based on the merit of the investment, as listed below:

•    Activity-based incentives for tax minimization in Thailand: These depend on the group categorization of the activity of the investment, which points out its significance. Group A activities are granted tax and nontax incentives and group B ones are granted mostly nontax incentives and some import duty benefits;
•    Merit-based incentives in Thailand: They are granted for the encouragement of the investment or expenditure in a certain category of projects which involve development of competitiveness, decentralization or industrial area growth benefiting the country or the industry. Our lawyers in Thailand can provide more information on what these types of incentives are.
 

Activity-based incentives in Thailand


The activity-based incentives tax incentives in Thailand according to each group categorization leading to tax reduction are as follows:

•    For A1 activities (knowledge-based activities): 
     o    an eight-year corporate income tax exemption;
     o    exemption from import duty on machinery and raw materials;
     o    nontax incentives.
•    For A2 activities (activities that enhance the infrastructure of Thailand):
     o    an exemption of eight years from corporate income tax;
     o    exemptions from import duty on machinery and raw materials;
     o    nontax incentives.
•    For A3 activities (high-tech activities):
     o    an exemption of five years on the corporate income tax, unless otherwise provided;
     o    exemptions from import duty on machinery and raw materials;
     o    nontax incentives.
•    For A4 activities (activities which bring value to the local resources and reinforce the supply chain):
     o    an exemption of three years on the corporate income tax;
     o    exemptions from import duty on machinery and raw materials;
     o    nontax incentives.
•    For B1 activities (some supporting industry activities):
     o    exemptions from import duty on machinery and raw materials;
     o    nontax incentives.
•    For B2 activities (activities in the supporting industry which do not fall in the B1 category):
     o    exemption from import duty on raw materials;
     o    nontax incentives.

If you need more details, please get in touch with our Thai law firm.

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