Tax Flood Relief Measures for BOI Promoted Companies
The Cabinet has approved tax relief measures for Board of Investment (‘BOI’) promoted companies that have been affected by the flooding.
Keywords: Tax, Thailand, BOI, Flooding, Tax Holiday
The following tax measures for BOI promoted companies have been approved by Cabinet, but are still to be passed into law.
Flood affected companies that wish to establish a temporary production facility or make a new investment in Thailand.
For companies investing in a province affected by the floods the following incentives are being proposed:
BOI Zone | Industrial Estate | Income Tax Holiday | Income Tax Reduction After Tax Holiday |
Zone 1 | Inside/ Outside | 8 years without cap | - |
Zone 2 | Inside | 8 years without cap | 50% reduction of tax for a further 3 years |
Outside | 8 years without cap | - | |
Zone 3 | Inside/ Outside and Special | 8 years without cap | 50% reduction of tax for a further 5 years |
For BOI promoted companies investing in another non- flood affected province, the amount of tax exempted will be capped.
New investors or any investor not affected by the floods who wishes to undertake a new investment or expand its existing business in Thailand
The following income tax concessions will apply:
BOI Zone | Industrial Estate | Income Tax Holiday | Income Tax Reduction After Tax Holiday |
Zone 1 | Inside | 8 years cap | 50% reduction for another 3 years |
Outside | 8 years cap | - | |
Zone 2 | Inside | 8 years cap | 50% reduction for another 5 years |
Outside | 8 years cap | - | |
Zone 3 | Inside/ Outside and Special | 8 years cap | 50% reduction for another 5 years |
Approval Process
There are still a few issues that need to be ironed out before the incentives proposed above are passed into law. The Cabinet decision grants generous incentives for existing companies to invest in a province affected by flooding. However, some parts of that province may not have been affected at all whilst other regions will have been inundated with water. Likewise it appears a little inequitable that a new company investing in an industrial estate in Zone 2 for instance will be entitled to a 5 year 50% income tax reduction after the 8 year holiday but an existing company affected by flooding will only be entitled to a 3 year concession.
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