In order to facilitate the transition to a knowledge-base
economy, the Board of Investment (BOI), chaired by Deputy Prime Minister
Somkid Jatusripitak, recently announced that projects investing in skills,
technology and innovation (STI) will be eligible to receive maximum tax
incentives from the BOI, and that corporatized state-owned enterprises
(SOEs) would be eligible for investment promotion.
STI Policy
Recognizing that skills, technology and innovation are
critical to Thailand’s continued development; the Board of Investment has
adopted a series of measures to stimulate investment in STI.
Under this policy, the Board will offer additional tax
incentives to specific activities in three target industries (fashion,
automotive and ICT) that need to innovate in order to remain competitive in
the increasingly-global markets of the 21st century.
For fashion, the BOI will consider both upstream and
downstream textile projects to support the entire garment industry value
chain, as well as projects in leather and jewelry.
For the automotive industry, the BOI will include the
manufacture of machinery and equipment, vehicle parts, electric-powered
vehicles or parts, 4-stroke motorcycle engines, automobile engines and
multi-purpose engines.
For the ICT industry, the BOI will include the
manufacture of electronic products, the manufacture part or supplies used
for electronic apparatus, and the manufacture of material for
micro-processors.
The STI criteria that will be used for projects that have
not yet received investment promotion approval include the following:
* R&D or design expenditures of not less than 1-2
percent of annual total sales in the first 3 years.
* Recruitment of not less than 1-5 percent of total
workforce within the first 3 years of S&T personnel with a minimum of a
bachelor’s degree in science, engineering or other technology, R&D or
design-related fields.
* Training of staff of not less than 1 percent of payroll
within the first 3 years
* Cost of developing vendors or costs of supporting
related educational institutes must be not less than 1 percent of annual
total sales within the first 3 years.
* Projects that meet each of these criteria will receive
one additional year’s corporate income tax holiday, which will not be
subject to the cap on benefits, with the total available corporate income
tax holiday not to exceed eight years. In addition, machinery imported for
use in these projects will be exempt from import duty.
Under this policy, projects in 7 activities that directly
support the development of STI in the Kingdom will be treated as priority
activities and will receive maximum incentives, regardless of location.
Benefits for these projects will not be subject to the cap on incentives,
and imports of machinery will be duty-free.
1.-Manufacture of medical supplies or medical equipment
2.-Manufacture of scientific instruments
3.-Electronic design
4.-Research and development (R&D)
5.-Scientific laboratories
6.-Calibration services
7.-Human resources development (HRD)
In order to promote STI infrastructure and support
facilities, science park projects will be treated as priority activities,
and will receive maximum incentives, including: 8-year corporate income tax
holiday, with no cap on benefits, 50% reduction of corporate income tax for
an additional five years after expiry of the income tax holiday, and
duty-free import of machinery.
These projects must include: incubation center,
international-standard telecommunications systems, backup electricity
generators and other facilities as specified by the Board of Investment.
Projects locating within science centers that are
involved in electronic design, R&D, scientific laboratories, calibration
services and educational institutes and training centers will receive the
same benefits as the science park.
The Board also announced that corporatized state-owned enterprises would
be eligible to receive BOI investment incentives on any new investments.
