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.

Want to know more?