New criteria for providing corporate income tax incentives to international distribution centres

The Board of Investment (“BOI”) has set out new criteria for providing corporate income tax incentives to an international distribution centre (“IDC”).

Keywords: Mazars, Thailand, Legal, BOI, IDC

11 July 2022

In order to receive corporate income tax incentives, an IDC must distribute goods abroad in at least five countries and the income from managing goods abroad must make up more than 50% of its total income. If an IDC fails to meet these conditions during a given accounting period, it will not receive corporate income tax incentives for that period.

When an IDC applies for a licence to start operating, the BOI will check to see if the IDC meets these conditions at least one year before applying for such a licence. If not, the BOI will change the entity’s status from an IDC to simply a distribution centre. In that case, the entity would still be entitled to non-tax-related incentives, as well as an exemption from import duty on machinery and raw materials used in production for export.

Reference: The Board of Investment