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Additional Investment Policies

1. Investment Promotion Policy for Sustainable Development

To promote sustainable development, enhance the country’s competitiveness in science and technology, encourage the improvement of manufacturing quality as well as reduce environmental impact, the Board of Investment offers special tax incentives under the Investment Policy for Sustainable Development campaign. (Please see the Board of Investment Announcement No. 2/2553 dated April 23, 2010 for further details.)

1. Investment promotion measures for target industries

Incentives

  • Import duty exemption on machinery
  • Eight-year corporate income tax exemption without being subject to a corporate income tax exemption cap
  • Fifty percent reduction of corporate income tax on net profit for five years after expiry of tax holiday
  • Double deduction of transportation, electricity and water supply costs for ten years from the date of income derivation from promoted project
  • Twenty five percent deduction of the cost of installation or construction of facilities in addition to normal depreciation deduction

Conditions

  • Projects can be located anywhere except Bangkok
  • Applications must be submitted to the OBOI by December 31, 2012
  • Projects must be in the following activities:


1) Activities related to energy conservation and alternative energy

Category 1.18 Manufacture of alcohol or fuel from agricultural products, including scrap, garbage and/or waste

Category 4.2.3 Manufacture of energy-conserving machinery or equipment machinery or equipment which uses alternative energy

Category 4.15 Manufacture of fuel cells

Category 7.1.1 Production of electricity or steam power

- For cases that use alternative energy, such as energy agricultural material, biogas and wind energy

2) Activities related to eco-friendly materials and products

Category 6.3 Manufacture of eco-friendly chemicals

Category 6.4 Manufacture of eco-friendly products

3) High-technology businesses

Category 1.11.10 Manufacture of medical food

Category 2.5.3 Manufacture of advanced ceramics

Category 2.19 Manufacture of nano materials or products from manufactured nano materials

Category 3.1.1 Manufacture of natural or synthetic fibers

- only manufacture of functional fiber

Category 3.9 Manufacture of medical equipment

Category 3.10 Manufacture of scientific equipment

Category 4.2.1 Manufacture of machinery, equipment and parts that have engineering design

Category 4.2.2 Manufacture of Manufacture of farm machinery or equipment and food processing machinery or equipment

Category 4.2.4 Manufacture or repair of mould and die

- only manufacture of mould and die

Category 4.9 Manufacture, repair or conversion of aircraft, including aircraft parts and equipment or onboard equipment

Category 4.10 Manufacture of vehicle parts

- Automatic Transmissions

- Continuously Variable Transmissions (CVT)

- Traction motors for automobiles; e.g., hybrid or fuel cell cars

- Electronic Stability Control (ESC)

- Regenerative Braking Systems

- Rubber tires for vehicles

Category 5.4.3 Manufacture of industrial electronics

Category 5.4.4 Manufacture of telecommunication equipment

Category 5.5.1 Manufacture of semiconductors

Category 5.5.2 Manufacture of memory storage equipment

- only manufacture of Hard Disk Drive(HDD), Solid State Drive (SSD) and HDD and SSD parts

Category 5.5.4 Manufacture of parts for telecommunication equipment

Category 5.5.5 Manufacture of parts for medical electronics

Category 5.5.6 Manufacture of parts for agricultural electronics

Category 5.5.7 Manufacture of electronic parts for vehicles

Category 5.5.10 Manufacture of solar cells and raw materials for solar cells

Category 5.5.12 Manufacture of flat panel display

Category 5.6 Manufacture of material for microelectronics

Category 5.7 Electronic design

Category 7.18 Human resource development

Category 7.19 Biotechnology

Category 7.20 Research and development

Category 7.21 Scientific laboratories

Category 7.22 Calibration services

2. Measure to promote energy conservation, alternative energy utilization or reduction of environmental impacts

This measure focuses on upgrading the machinery and improving technology to save energy and reduce environmental impacts.

Incentives

  • Exemption of import duty for machinery
  • Three-year corporate income tax exemption on the revenue of existing projects, accounting for 70% of the investment under this measure excluding cost of land and working capital. The corporate tax exemption period will start from the date of income derivation after the issuance of promotion certificate.

Conditions

  • This measure applies to both BOI and Non-BOI promoted existing projects under activities that are eligible for investment promotion.
  • BOI-Promoted projects can also apply for this measure when the tax exemption or reduction period expires, or in case the projects do not receive the corporate income tax exemption.
  • The applicant must submit investment plan for machinery change to save energy, to introduce alternative energy into the project, or to reduce environmental effects by implementing one of the following:

    1) Investment in upgrading the machinery to modern technology that reduces energy consumption at the stipulated ratio.

    2) Investment in upgrading the machinery in order to use alternative energy at the stipulated ratio to the total energy consumption.

    3) Investment in upgrading the machinery to reduce environmental impact, namely reducing waste, waste water or exhaust air according to the stipulated criteria.

  • Application shall be submitted to the OBOI within December 31, 2012 and must complete the implementation within three years from the date of promotion certificate issuance.
  • Application for investment promotion under this measure by existing projects of all investment sizes shall be considered by the Office of the Board of Investment.


3. Measure to promote production efficiency improvement by technology upgrade for manufacturing of new products

This measure aims to encourage investors to make efficient use of their machinery as well as to be able to expand to a higher value product line while increasing revenue and maintaining employment.

Incentives

  • Exemption of import duty on machinery regardless of zone
  • Three-year corporate income tax exemption on revenue derived from the production of new product, not exceeding 100% of the investment in upgrading the production line

Conditions

  • This measure applies to both BOI and Non-BOI promoted existing projects.
  • Investors must invest in upgrading the existing production line to be able to manufacture new product.
  • The new product manufactured from the upgraded line must differ from existing product and have distinct name. The new product must also be in the list eligible for the investment promotion with corporate income tax exemption privilege.
  • The upgrading of production line does not include the upgrading of assembly line.
  • The application along with investment plan on technology upgrade for the manufacturing of new product must be submitted to the OBOI within December 31, 2012.
  • Application for investment promotion under this measure by existing projects of all investment sizes shall be considered by the Office of the Board of Investment.


4. Measure to solve environmental problems

This measure is designed to promote and encourage industrial plants to give priority to the environmental management.

Incentives

  • Exemption from import duty on machinery for machinery improvement to reduce the environmental impact.
  • Three-year corporate income tax exemption on the revenue of existing projects, accounting for 70% of the investment value of the improvement under this measure excluding cost of land and working capital. The corporate tax exemption period will start from the date of income derivation after the issuance of promotion certificate.

Conditions

  • Applicants must comply with the environmental management criteria and conditions specified by the government with pollutant values less than the legal control rate and must be in the following industries:

    - Oil refinery

    - Natural gas separation

    - Power generation

    - Chemicals and petrochemicals

    - Minerals and base metals

  • This measure applies to both BOI and Non-BOI promoted existing projects.
  • Projects must reduce their environmental impact according to criteria and methods specified by the Office of Board of Investment.
  • Applicants must submit the application including a plan to reduce environmental impact according to the criteria and methods specified by the Office of Board of Investment by December 31, 2012 and complete the implementation within 3 years from the date of promotion certificate issuance.
  • Application for investment promotion under this measure by existing projects of all investment sizes shall be considered by the Office of the Board of Investment.