Investment Promotion Act

Thailand's main incentives are granted by the Board of Investments (BOI) under the Investment Promotion Act. The incentives are granted for projects involving certain industries and products deemed important and useful for Thailand by the BOI. Projects that are deemed to strengthen Thailand’s industrial and technological capability or use domestic resources generally qualify. Particular project promotion focus is subject to change and broadly includes:

Agro, bio, and medical industry;
Advanced manufacturing industries such as machine industry, automotive industry, electronics, and electrical appliances industry, and defense industry;
Basic and supporting industries such as mining metal and material industry, chemical and petrochemical industry, industrial area development, paper industry, energy utilities, and environmental industry;
Digital, creative, and high-value services, including smart city development, logistics industry, tourism industry, and professional services; and
Wafer fabrication, biotech, nanotech, and advanced materials that involve technology transfer and cooperation with Thailand's higher education institutions and research entities, effective from 1 January 2023.

The incentives available include tax and non-tax incentives and certain guarantees and protections. The main tax incentives available include:

Up to 13 years of corporate income tax exemption, with or without a cap equal to or more than the amount of the investment (excluding the cost of land and working capital), depending on the applicable law, the promoted activity, and the location;
Exemption of tax on dividends during the tax holiday period and 6 months thereafter;
Up to 10 years, 50% corporate income tax reduction from the date on which the revenue is first earned, if the business has not benefitted from a tax holiday;
Exemption/reduction of import duties on machinery and items used for research and development;
Up to 90% reduction of import duties for raw or essential materials if used in manufacturing for domestic sale, or exemption if used in production for export;
Double deductions of the costs of transportation, electricity, and water supply up to 10 years from the date on which the revenue is first earned from the promoted activity;
Additional 25% deduction of the cost of installation or construction of facilities. The additional deduction can be claimed within 10 years from the date on which the revenue is first earned from the promoted activity;
Additional deduction from the net profit of up to 70% of the investment for 10 years;
Subsidy of up to THB 10 billion under the Competitiveness Enhancement Fund, subject to certain conditions;
Additional 50% deduction for investments in machinery made between 1 September 2019 and 31 May 2020, subject to certain conditions. The additional deduction shall be made equally over 5 consecutive years, commencing from the first year of depreciation. Incentives provided are decided by the BOI on a project-by-project basis and depend on the type of activity, the location in Thailand, and certain other conditions, such as the amount of capital investment; and
Additional 50% corporate income tax deduction for a period of 5 years for projects in certain industries with realized investments of at least THB 1 billion within 12 months from the promotion certificate issuance. Qualified projects were required to submit applications from 2 January 2024 up to the last working day of 2024.

For certain project types, foreign investment is restricted. For projects involving agriculture, animal husbandry, fishery, mineral exploration, and mining, or in the service sector, no more than 49% of the registered capital may be held by foreign parties. In other cases, 100% foreign participation is generally allowed.

Additional incentives are granted for competitive enhancement, decentralization, and industrial area development:

Competitiveness enhancement: Incentives are provided for investment in R&D, donations to institutes and centers engaged in human resource development and technical and skill development training centers, license fees for technology development, advanced technology training, local raw material suppliers, product and packaging design, and others. The incentives include an additional 1 to 5 years of tax exemption depending on the investment amount and its application (capped at a total of 13 years), and the exemption cap may be increased to up to 300% of the investment;
Decentralization: Incentives are provided for investment in investment promotion zones. The incentives include an additional three years of tax exemption (capped at a total of 13 years). For certain industries, the incentive is instead a 50% tax reduction for five years following the standard eight-year exemption. Other incentives include a 10-year double deduction for transportation, electricity, and water costs, a 25% deduction of infrastructure installation or construction costs in addition to depreciation; and
Industrial area development: Incentives include an additional year of tax exemption (capped at a total of eight years (13 years for certain specified activities).

Effective 1 January 2023, the BOI approved new industry categories for providing special incentives. The new categories include the following:

Manufacturing of hydrogen vehicles and setting up of electric vehicle battery swapping stations;
Novel or organic food production;
Renewable energy generation, such as the generation of hydrogen from water, green ammonia from hydrocarbons or fossil fuels, and electricity or steam from hydrogen; and
Aerospace activities, such as the manufacturing of equipment for repair and maintenance, production of ground service parts, production of mechanic/ electronic parts for satellites or space objects, software development of satellites and ground stations, launching services, and manufacturing of control systems.

On 7 June 2023, to mitigate the impact of Pillar Two, the Thai BOI approved changes to the BOI tax exemptions regime, whereby companies benefiting from or eligible for a corporate tax exemption may instead elect to be taxed at an alternative reduced tax rate of 10% (being half the current standard corporate tax rate) for twice the period of the tax exemption regime (which varies depending on the activity), up to a maximum of 10 years. (see Sec. 8.1.).

Economic Corridors

Eastern Economic Corridor

The Eastern Economic Corridor (EEC) comprises three provinces viz. Rayong, Chonburi, and Chachoengsao. Qualifying entities are entities that carry on eligible activities in the EEC and that meet certain general and specified conditions. Eligible activities include Group A1± to A4 (as classified by the BOI for investment promotion), targeted core technologies, and enabling services.

The general and additional tax incentives vary based on the type of activities as classified by the BOI for investment promotion, and are as follows:

Corporate income tax exemption for 10 to 13 years for A1+ group;
Corporate income tax exemption for up to 8 years for A1 and A2 groups; and
Corporate income tax exemption for 3 to 5 years for other activities as per Group A3 and A4 groups.

Additionally, an extension of the tax exemption period for up to 2 years or a 50% reduction in the corporate tax rate for an additional period of up to 3 years, is provided if the activities result in human resources development or if the project is located in a specified area.

In general, applications must be submitted by 31 December 2025. However, there is no end date for filing applications for investments in five promoted zones for specific industries, which include Innovation Platform, Digital Park Thailand, Eastern Airport City, Thammasat Integrated Medical Innovation Center, and Genomics Thailand at Burapha University (Bang Saen).

New Economic Corridors

Effective 1 January 2023, the BOI approved the designation of new economic corridors as special investment zones in four regions of Thailand, covering a total of 16 provinces. Investments in such regions receive a wide range of incentives. The four regions, namely the Northern Economic Corridor, North-Eastern Economic Corridor, Central-Western Economic Corridor, and Southern Economic Corridor will add to the existing Eastern Economic Corridor. The target industries and provinces under each of the corridors are as follows:

Economic Corridor	Province	Target Industry
Northern	Chiang Mai, Chiang Rai, Lamphun, Lampang	Agriculture and food, digital, creative, and tourism (including health tourism) industries
North-Eastern	Nakhon Ratchasima, Khon Kaen, Udon Thani, Nong Khai	Agriculture and food, biological industries
Central-Western	Ayutthaya, Nakhon Pathom, Suphan Buri, Kanchanaburi	Agriculture and food, electrical and electronic industries
Southern	Chumphon, Ranong, Surat Thani, Nakhon Si Thammarat	Agriculture and food, biological, and tourism (including health tourism) industries

The tax incentives vary based on the type of activities. The basic incentives are similar to the basic incentives provided for the EEC corridor given above. Additionally, an extension of the tax exemption period for up to 2 years or a 50% reduction in the corporate tax rate for an additional period of up to 5 years, is provided if the activities result in human resources development or if the project is located in a specified area.

Southern Border Provinces

New investments in the Southern Border Provinces and projects undertaken in the model cities of Southern Border Provinces are provided with tax incentives subject to the following conditions:

The minimum investment capital must be at least THB 500,000 (excluding the cost of land and working capital);
Domestic machinery used in the promoted projects must not be more than THB 10 million, and investment in new machinery must be at least one-fourth of the value of the used machinery;
Applications for promotion of the existing projects must be submitted when the new projects have installed the machinery and are ready to start full operation; and
Applications for investment promotion of new projects must be submitted within the last working day of 2027 (extended from 2022).

All activities notified by BOI Announcement No 2/557, as well as a few additional activities, are eligible for the investment promotion incentives. Additional activities include the manufacture of personal care products, construction materials, pre-stressed concrete for public utilities, plastic products, paper pulp or paper, and factory development for industrial plants, etc. Incentives for projects under general case include the following:

Corporate income tax exemption for a period of up to 8 years without any cap;
Reduction of corporate income tax by 50% on net profit for a period of 5 years beginning from the date on which the corporate income tax exemption period expires;
Double deduction on the costs of transportation, electricity, and water supply for a period of 15 years (25 years in special cases) beginning from the date on which revenue is generated from the project;
Deduction of the cost of installation or construction of facilities up to 25% of the investment capital, in addition to the normal depreciation;
Exemption of import duties on machinery;
Exemption of import duties on raw and essential materials used in manufacturing for export for a period of 5 years (10 years in special cases);
Reduction of import duties by 90% on raw and essential materials used in manufacturing for domestic sale for a period of 5 years (10 years in special cases); and
For existing projects in special cases, a corporate income tax exemption for a period of 3 years (5 years in special cases) up to 100% of the capital invested in the new project in the Southern border provinces.

Incentives for Special Economic Zones (SEZs)

SEZs are the Special Economic Development Zones stipulated in accordance with Thailand's SEZ regulations. Qualifying entities are entities that carry on manufacturing or service activities in an SEZ that meet certain general and specified conditions. However, the head office of the entity is not required to be located in the SEZ.

Tax incentives to eligible SEZs include:

Corporate income tax benefits for targeted activities:

corporate income tax exemption (excluding the cost of land and working capital) for a period of 8 years (may be restricted to 100% of the cost of investment). This applies to 13 targeted activities, and 5 special activities in the Special Economic Zone;
an additional deduction of 50% of corporate income tax for 5 years after the tax holiday period with a cap according to investment capital. This applies to 14 targeted activities;

Corporate income tax benefits for general activities –

corporate income tax exemption for an additional 3 years but not exceeding 8 years in total, capped according to investment capital; and
an additional 50% reduction of corporate income tax for 5 years where the business has benefitted from the 8-year tax exemption;

Double deduction of the cost of transportation, electricity, and water supply from the BOI revenue for a period of 10 years starting from the date of earning the first revenue;
Additional 25% deduction of the installation or construction cost of facilities;
Exemption from import duty on raw materials and essentials used for producing export goods for a period of 5 years; and
Exemption from import duty on machinery.

Entities claiming the SEZ incentive are not allowed to claim other corporate income tax incentives.

Further, companies and juristic partnerships incorporated during the period from 1 January 2024 until 31 December 2026 that carry on business in specified SEZs and in qualified targeted industries, can benefit from the following incentives, provided certain specified conditions are met.

A corporate income tax exemption for a period of 5 years if certain conditions are met, including that the business must be approved and must follow the rules of the National Science and Technology Development Agency (NSTDA), the paid-up capital must not be more than THB 5 million on the last day of the accounting period, and the annual income must not be more than THB 30 million. Applications must be filed by 31 December 2027, and the application must be approved for the incentive to take effect;
100% additional deduction for expenditure incurred during the period from 1 January 2024 until 31 December 2026 for investment, additions, expansion, improvement (other than repairs), or alteration of assets used in business operations carried on in the SEZ, provided certain conditions are met, including that the assets must never have been used before. Clawback provisions apply if the company subsequently fails to meet any of the conditions;
200% additional deduction for investments made in companies or partnerships operating in an SEZ between 1 January 2024 and 31 December 2026 by increasing the capital of existing SEZ company/ partnership entity or by establishing new companies/ partnerships in an SEZ. The additional deduction is subject to certain conditions, including that the investor must not have had any place of business in an SEZ for a minimum of 1 year prior to the investment, and the shares/interests in the invested SEZ entities must not be transferred or sold except for specified justifiable reasons such as capital increase; and
Reduced corporate income tax rate of 3% on net profits is provided for income derived from goods or services from business operations in SEZs, including SEZs in the Satun province or in certain areas of the Songkhla province (the Chana, Nathawee, Sabayoi, or Thepha districts).

On 14 January 2025, the Thai authorities announced that companies benefiting from or eligible for a corporate tax exemption under the law on investment promotion may instead elect to be taxed at an alternative reduced tax rate of 10% (50% of the standard corporate tax rate) for 10 consecutive accounting periods, on the net profits of companies or juristic partnerships that carry out targeted businesses as specified by the SEZ Development Policy Committee.

COVID-19 Emergency Measures

In response to the COVID-19 pandemic, Thailand’s BOI announced the following incentives for the medical sector:

An 8-year corporate income tax exemption is granted for the production of raw materials used in the manufacture of medical products, such as pharmaceutical-grade alcohol production; and
Additional benefits in the form of an extension of corporate income tax exemption from 3 years to 5 years are provided for the production of non-woven fabric used as raw materials for the production of medical masks or medical devices; and
A 50% reduction in corporate income tax for an additional period of 3 years for qualified investments in the medical sector.

Research and Development

Special incentives are provided under the Investment Promotion Act for qualified research and development (R&D) contractors. The incentives include:

Up to 8 years of corporate income tax exemption on income from the provisions of qualified R&D services;
Import duty exemption for raw materials, and machinery imported for use in export and items used for R&D; and
Exemption of tax on dividends during the tax holiday period and 6 months thereafter.

In addition, effective 1 January 2020, certain expenses incurred for R&D activities are eligible for a 200% deduction, including salary and wage expenses paid to employees, or payments made to recognized government agencies, or to Thai resident companies (private developers) providing R&D services in Thailand.

For the period from 1 January 2015 to 31 December 2019, an increased incentive of 300% was available for qualifying research and development expenses incurred in the field of technology and innovation. This increased deduction was capped at a percentage of the gross revenue of the taxpayer. The cap percentage was:

60% for gross revenue up to THB 50 million;
9% for gross revenue over THB 50 million up to 200 million; and
6% for gross revenue over THB 200 million.

International Business Centers

As part of the OECD review in relation to BEPS Action, Thailand on 29 December 2018 enacted a new tax incentive regime known as International Business Centers (IBC), which replaced earlier regimes of Regional Operating Headquarters (ROH), International Headquarters (IHQ), Treasury Center and International Trading Centers (ITC).

Initially, companies operating under the older regimes were allowed to apply the incentives until the approval expires, except companies with ROH status, which may apply incentives until 2020. The companies under the older regimes may apply to convert to the IBC regime, subject to meeting the conditions. However, the companies under ROH, IHQ, and Treasury Center regimes may opt to convert their status to an IBC after the fulfillment of certain conditions. However, on 1 November 2019, Thailand published royal decrees ending the grandfathering provisions for these regimes.

Certain qualifying companies are eligible for incentives and benefits under the IBC regime for a standard period of 15 years.

Tax Benefits

Reduced corporate tax rates on qualifying support service, treasury center, and royalty income based on meeting the annual local operating expenditure thresholds, including:

3% if the local expenditure is at least THB 600 million per period;
5% if the local expenditure is at least THB 300 million per period; and
8% if the local expenditure is at least THB 60 million per period (For regional and international headquarters, a lower expenditure threshold of THD 15 million is applied instead of THD 60 million);

A tax exemption on both domestic and foreign-sourced dividend income from associated enterprises;
A withholding tax exemption on dividend distributions to non-resident shareholders and interest payments to foreign beneficiaries in relation to loans for treasury activities;
An exemption from specific business tax on qualifying income from treasury services; and
A flat personal income tax rate of 15% for expatriate employees.

The IBC regime applies to royalty income from associated enterprises arising from R&D activities performed in Thailand, and income from the provision of headquarters or treasury management services to associated enterprises. An enterprise is considered as an associated enterprise if the enterprise holds at least 25% directly or indirectly in the IBC, or the IBC holds at least 25% in the enterprise, or a third party has at least a 25% direct or indirect holding in both.

Qualifying Conditions

In order to qualify for the IBC regime and claim the benefits, the companies are required to obtain approval from the Director-General of the Revenue Department and fulfill the following conditions:

The company must be set up under Thai law to provide qualifying support services or treasury services to its associated enterprises;
Expenses for the operations paid to recipients in Thailand must be at least THB 60 million in each accounting period;
The company must have paid-up capital of at least THB 10 million at the end of the accounting period;
The company must have at least ten qualified employees (at least 5 for the treasury center); and
Other rules, procedures, and conditions as prescribed by the Director-General of the Revenue Department must be met.

However, if the conditions are not met for one year, including minimum local expenditure and providing the qualifying services, the IBC incentives will not apply for that year. If the conditions are not met in consecutive years, the IBC status may be revoked, and incentives provided in past years may be recaptured.

Regional Operating Headquarters

Thailand provides several incentives for regional operating headquarters (ROH) established in the country under an "old" regime introduced in 2002 and a "new" regime introduced in 2010. The companies under the old regime can convert to the new regime if the conditions have been met. Failure to meet the conditions of the new regime results in a recapture of the tax incentives; however, no such recapture applies to the old regime. Until 14 November 2015, companies were allowed to choose to apply for either the old or new regime, subject to certain conditions.

On 1 May 2015, Thailand enacted a new tax regime for International Headquarters (IHQ) and International Trading Centers (ITC). The regime replaced the regime for Regional Operating Headquarters and International Procurement Centers and relaxed certain foreign ownership and activity limitations. The companies operating under the previous regimes can apply for the new regime incentives without recapture provisions.

Old Regime

Reduced tax rate of 10% on net profit/ income received before 1 June 2019 from services provided to affiliates;
Reduced tax rate of 10% on net profit/ income received before 1 June 2019 from royalties and income received before 31 December 2020 in case of interest income from affiliates;
Tax exemption on dividends received from affiliates; and
Withholding tax exemption on dividends distributed to foreign shareholders.

New Regime

10-year tax exemption on net profit/ income received before 1 June 2019 from services provided to foreign affiliates, which may be extended for five additional years if the ROH has accumulated at least THB 150 million in operating expenses in Thailand by the end of the 10-year period;
10-year reduced tax rate of 10% on net profit/ income received before 1 June 2019 from royalties and interest income from affiliates, which may be extended for five additional years subject to the same conditions as above;
10-year tax exemption on dividends received from affiliates, which may be extended for five additional years subject to the same conditions as above; and
Withholding tax exemption on dividends distributed to foreign shareholders, paid up to 31 December 2020 out of profits derived from qualifying income before 1 June 2019.

A company is considered an affiliate of the ROH when one party holds 25% or more of the other's capital or has control over the other, or when a third party holds 25% or more of the capital of the ROH and the affiliate company or has control over both.

Old regime conditions include:

Must have paid-up capital of at least THB 10 million;
At least 50% of the ROH's income must be from foreign affiliates; and
Qualifying services must be provided to affiliates in at least three countries in the first year.

New regime conditions include:

Must have paid-up capital of at least THB 10 million;
At least 50% of the ROH's income must be from foreign affiliates;
Qualifying services must be provided to affiliates in at least one country outside Thailand in the first and second year, at least two countries in the third and fourth years, and at least three countries in the fifth year;
At least THB 15 million in operational expenses in Thailand per year, or at least THB 30 million in capital expenditure in Thailand per year;
At least 75% of the ROH's employees in Thailand must be skilled employees; and
At least five employees of the ROH in Thailand must earn at least THB 2.5 million per year from the third year.

International Headquarters and International Trading Centers

On 1 May 2015, Thailand enacted a new tax regime for International Headquarters (IHQ) and International Trading Centers (ITC). The regime replaced the regime for Regional Operating Headquarters (ROH) and International Procurement Centers.

Under the regime, a company may be considered an IHQ and ITC depending on the qualifying activities it performs. The conditions are essentially the same, and the benefits apply based on the activities of the company.

±±An IHQ is a company that provides management, technical and support services, or treasury center services to associated companies or branches overseas. An ITC is engaged in trade and trade-related services.

Tax Benefits:

Tax exemption for 15 years on certain income derived/ received before 1 June 2019 from an overseas associated company or branch, including:

income from providing management, technical, and support services;
income from providing treasury center services;
royalty income;
dividend income;
capital gains from the sale of shares of an associated company;
international trade, where the goods are not imported into Thailand (may be brought in as in transit or transshipment);
trade-related services; and
other income generated by overseas branches.

Reduced 10% income tax rate on certain income derived/ received before 1 June 2019 from an associated company or branch in Thailand, including:

income from providing management, technical, and support services;
income from providing treasury center services; and
royalty income.

Exemption from withholding tax on dividends distributed to non-residents up to 31 December 2020, if paid out of profits derived from qualifying income before 1 June 2019;
Exemption from business tax and withholding tax on interest paid on intercompany loans applies in case of loans received before 1 June 2019 to fund loans granted to affiliates; and
A reduced individual income tax flat rate of 15% for expatriate (foreign) employees is applied up to 31 December 2019.

Qualifying Management, Technical, and Support Services Include:

General administration, business planning, and coordination;
Procurement of raw materials and components;
Research and development of products;
Technical support;
Marketing and sales promotion planning;
Personnel management and regional training;
Financial advisory services;
Economics or investment research and analysis;
Credit control and administration; and
Other managerial services.

Qualifying Treasury Center Services Include:

Services of a Treasury Centre as permitted under the Exchange Control Act; and
Borrowing from a Thai financial institution or associated enterprises in Thailand and re-lending in Thai currency, the amount received from the above-permitted activities to associated enterprises in Thailand.

Qualifying Trade and Trade-Related Services Include:

Procurement of goods;
Maintenance of goods in transit;
Packaging of goods;
Delivery of goods;
Insurance of goods;
Advisory and technical support services and training on goods; and
Other related services.

Qualifying Conditions

In order to qualify as an IHQ or ITC and obtain the benefits, a company must submit an application to the Director-General of the Thai Revenue Department and meet the following conditions:

The company must be incorporated in Thailand;
It must have a paid-up capital of at least THB 10 million at the end of each accounting period;
It must provide qualifying services to overseas associated companies or branches; and
It must incur local operating expenses in Thailand of at least THB 15 million annually.

Effective 1 July 2018, the royalty income of an IHQ must be derived from Research and Development activities performed in Thailand. The eligible R&D activities may be carried out by either the IHQ itself or by an R&D service provider in Thailand on the fulfillment of certain conditions as may be prescribed by the Director-General.

Unlike the previous regime, if a company fails to meet the conditions in a particular year, the benefits will not apply for that year only.

Incentives for Small and Medium Enterprises

On 11 March 2020, BOI introduced investment promotion measures for small and medium enterprises (SMEs) by way of corporate tax exemption of up to 200% of capital investment (excluding land cost and working capital) subject to the following conditions:

SMEs must be engaged in category A or category B1 activities (as classified by the BOI for investment promotion);
Resident shareholders must own at least 51% of the shareholding;
Paid-up capital does not exceed THB 0.5 million (excluding land cost and working capital);
Annual revenue from BOI and non-BOI activities not exceeding THB 500 million per year for the first 3 years;
Debt-equity ratio must be restricted to 4:1; and
SMEs must invest in new machinery accounting for at least 50% of the total used machinery or must invest in domestically sourced used machinery with a value of up to THB 10 million.

SMEs are also granted additional merit-based incentives to boost competitiveness, incentives for decentralization, and incentives for industrial area development. An additional corporate tax exemption of up to 200% of capital investment (excluding land cost and working capital) is provided for SMEs located in SEZs. To claim the benefit, an application was required to be filed with the revenue department by the end of the year 2022 (extended from 2021).

Incentives for Software and Digital Content Development Companies

The BOI provides the following incentives for companies engaged in software development, platform services, digital content, digital infrastructure, and digital eco system supported businesses having a minimum annual investment of THB 1.5 million, primarily based on employee salary expenditures:

Up to 13 years of corporate income tax exemption capped at 100 % of the actual additional salary expenditure for newly hired Thai information technology personnel (after the application date for investment promotion), IT training costs, and expenditure incurred for obtaining required certifications (such as ISO 29110 or CMMI Level 2);
An additional 50% reduction in corporate income tax for up to five years; and
An exemption on import duties for raw materials and machinery used for production.

Thailand Plus Incentives

In September 2019, the government announced a new promotion package, ‘Thailand Plus’, to attract investment and facilitate the relocation of companies to Thailand. The package and the subsequent decrees issued from time to time include the following measures:

A 50% tax reduction for five additional years for an investment of at least THB 1 billion in specified activities by December 2021 (subsequent to the existing 5 years of tax reduction provided for under the Investment Promotion Act- see above);
A double deduction for investment in machinery and computer software for automation systems made between 1 January 2021 and 31 December 2025 (extended from 31 December 2022), subject to certain conditions, including that:

the machinery/software is new, located in Thailand, and is used for a certified automation investment project;
the machinery/software is depreciable and is ready for use by 31 December 2025;
no other incentives are claimed in respect of the machinery/software; and
the machinery/ software is not used in a business that is exempt from income tax;

Varying deductions in respect of employee training expenses related to advanced technology, as approved by the Ministry, and in respect of expenses incurred on recruitment of highly skilled manpower in the STEM (Science, Technology, Engineering, and Mathematics) fields, including:

150% deduction for expenditure incurred on salaries of highly skilled employees hired in the STEM fields. The deduction is capped at THB 100,000 per month for salary paid between 1 January 2023 and 31 December 2025 (extended from the period 1 January 2021 to 31 December 2022) and is subject to certain conditions including that the employee:

is certified as highly skilled in one of the STEM fields and works in a relevant position;
commences work under an employment contract between 1 January 2023 and 31 December 2025; and
was not an employee of a company in the STEM field for a period of one year before the commencement of work under an employment contract as above;

100% deduction for expenses related to apprenticeship programs;
200% deduction for expenses related to advanced STEM training provided to employees, both in-house and external, subject to certain conditions;
250% deduction for expenditure incurred in respect of employee’s education or training or to organize training in courses accredited by relevant government agencies from 1 January 2023 up to 31 December 2025 (extended from 1 January 2021up to 31 December 2022), subject to certain conditions; and
a 5-year corporate income tax exemption to the extent of the funds invested by any corporate entity (not engaged in the business of education and training) for the purpose of establishing STEM education or vocational training institutions endorsed by the Ministry. Further, an exemption from import duty is available on machinery for educational or training institutions.

Tax Holiday for Venture Capital Funds

In 2015, the government announced a 10-year corporate and dividend tax exemption for venture capital funds with paid-up capital of at least THB 20 million that invest in specified sectors with a focus on promoting start-ups.

Incentives for Investment in Target Companies

Effective 15 June 2022, capital gains on the transfer of shares in supported target companies and the transfer of shares or units of a venture capital company or a trust investing in the supported target companies are exempt from tax for a period of 10 years. The exemption is available until 30 June 2032.

The following conditions apply:

Period of holding of shares is more than 24 months;
At least 80% of the total revenue of the target company must be derived from the supported business for 2 consecutive accounting periods before the transfer of shares;
The target company is continuously engaged in the supported business; and
The paid-up capital of the venture capital company or the trust is at least THB 20 million on the last day of the accounting period.

Supported target companies are companies engaged in developing or applying technology or innovation as an integral part of their business operations and operating in the target industries as prescribed by the Policy Committee on Enhanced Competitiveness.

Relocation Program

Effective 1 January 2023, an additional corporate income tax exemption applies to revenue generated from manufacturing activities relocated to Thailand. The exemption applies as follows:

A 5-year tax exemption (extendable up to 8 years) for relocating regional headquarters, R&D center, and manufacturing facilities; and
A 3-year tax exemption (extendable up to 8 years) for relocating manufacturing and regional headquarters.

Applications must be submitted by the last working day of 2024 (extended from December 2023).

Retention & Expansion Program

Effective 1 January 2023, the BOI approved special incentives for long-standing investors, including an additional corporate income tax exemption for up to 3 years or a 50% corporate income tax reduction for up to 5 years, depending on the type of activity. Long-standing investors are companies that fulfill the following conditions:

Granted investment benefits in the preceding 15 years for at least 3 projects with a combined investment value of not less than THB 10 billion (excluding cost of land and working capital); and
Applying for approval of a new project or expansion project with an investment of THB 500 million or more (excluding cost of land and working capital).

Applications must be submitted by the last working day of 2024 (extended from December 2023).

Incentive for Carbon Credits Income

The Thai government introduced a corporate income tax exemption on net profits arising from the sale of greenhouse gas reduction carbon credits. The tax exemption is available for up to three years for carbon emissions reduction projects, subject to the following rules, procedures, and conditions:

The voluntary greenhouse gas reduction project must be registered with the Thailand Greenhouse Gas Management Organization (TGO) from 20 March 2023 until 31 December 2027;
The three years begin from the year in which the certificate of registration is issued, with the carbon credit based on the amount of reduced greenhouse gas emissions from each registered project;
While determining the net profit, if any expenditure cannot be separately identified and segregated between the greenhouse gas reduction project and other business operations, then such expenses can be proportioned based on the income from each type of operation; and
Taxpayers must comply with the rules, procedures, and conditions set by the revenue department. Taxpayers who fail to meet the rules, procedures, and conditions will lose the exemption benefit and may be subject to tax on amounts already exempted, along with penalties and surcharges.

Other Incentives

An additional 25% deduction for costs incurred by companies for certified biodegradable plastic products from 1 January 2022 up to 31 December 2024 (extended from 1 January 2019 up to 31 December 2021) in order to promote a reduction of non-biodegradable plastic waste;
Thailand Board of Investment (BOI) approved incentive measures on 11 October 2021 for Industry 4.0 projects which require higher investments. Taxpayers are eligible for a 3-year corporate income tax exemption covering 100% of the investment into the industry 4.0 upgrades, which includes upgrading automation systems and other digital technology. Companies are required to submit their applications by the end of 2022 and are required to fully implement their upgrade plans within 3 years from the date of issuance of the BOI certificate;
Effective March 2022, tax exemptions are provided for investments in Thai startups whereby profits earned from the transfer of shares in Thai startups are exempt from corporate income tax provided the shares are held for at least 24 months prior to the transfer and at least 80% of the income is earned from the activities in targeted industries in two consecutive years prior to the transfer of shares. There are 12 government-specified targeted industries, viz., aviation and logistics, biofuels and biochemical, robotics, digital economy, medical hub, smart electronics, medical and wellness tourism, affluent tourism, agriculture and biotechnology, food for the future, defense and education, and human resource development. Both direct investments by individuals, corporates, partnerships, and indirect investments by venture capital funds are eligible for the benefit. The incentive is available until 30 June 2032; and
Thailand provided the following additional deductions for qualifying expenses incurred during the period 1 May 2024 to 30 November 2024 with respect to the organization of employee training seminars and participation in domestic trade fairs, exhibitions, and trade shows:

an additional 100% deduction for expenses incurred for organizing employee training seminars held in specified secondary tourism provinces and an additional 50% deduction for employee training seminars held in other areas; and
an additional 100% deduction for expenses incurred for rental space and service fees to participate in domestic trade fairs, exhibitions, and trade shows, provided the taxpayer obtains a certificate from the event organizer that it has actually attended the event.

COVID-19 Emergency Measures

In response to the COVID-19 pandemic, Thailand announced the following relief measures:

E-donations

A deduction for donations made through the tax authority e-donation system by companies (up to 2% of net profit), as follows:

Donations to the National Vaccine Institute to support research, development, production, and distribution of vaccines for COVID-19 and other diseases, for the period from 1 January 2021 up to 31 December 2023; and
Other donations for the period from 6 March 2022 up to 31 December 2023 (extended from 6 March 2021 up to 5 March 2022).

Debt Restructuring Transactions

The tax authorities provided tax exemptions on debt restructuring transactions undertaken between 1 January 2022 and 31 December 2026 (extended from 1 January 2020 up to 31 December 2021) between debtors and financial institutions or other creditors. The qualifying transactions eligible for such exemptions include:

Transfer of property, sale of goods or provision of services, and arranging instruments in relation to debt restructuring between a debtor and a financial institution or other creditors - exempt from income tax, VAT, specific business tax, and stamp duty;
Income received from forgiveness of debt between a debtor and a non-financial institution - exempt from income tax; and
Transfer of real estate pledged as collateral/security to the financial institutions or other creditors, subject to the conditions as set by the tax authorities - exempt from income tax, specific business tax, and stamp duty.

Development and Implementation of Electronic Tax System

On 12 January 2021, Thailand announced that companies and juristic partnerships are allowed a double deduction for expenses incurred for the development and implementation of an electronic tax system, including e-withholding tax (see Sec.8.1.), e-tax invoice, and e-receipt systems. The double deduction applies to costs incurred for acquiring computer hardware and software, etc., and for payments made to service providers for the use of electronic tax systems. The deduction is available for expenses incurred from 1 January 2020 to 31 December 2025 (extended from 31 December 2022), provided all the following conditions are met:

The assets have not been used previously;
The assets can be amortized or depreciated and are acquired and ready to use by 31 December 2025;
The assets are located in Thailand;
The assets are used for at least 3 consecutive years starting from the year when acquired and ready to use;
The assets are not granted any other tax incentive, in whole or in part; and
The assets are not used for activities that are exempt from corporate tax under the law governing investment promotion, enhancement of competitiveness in the targeted industries, or Eastern Economic Corridor, whether in whole or in part.

Tax Exemption on Transfer of Real Estate Assets to REITs

On 10 May 2022, Thailand announced tax exemptions for the transfer of real estate assets by companies and juristic partnerships to trustees of Real Estate Investment Trusts (REITs) under buyback arrangements. The transfer will be exempt from corporate income tax, VAT, specific business tax, and stamp duty, and the registration fee for the transfer will be reduced from 2% up to 0.01%. The tax measures are subject to fulfillment of the following conditions:

The transfer of the real estate asset to a REIT takes place within two years from the date of the royal decree entering into force; and
The asset is transferred back by the REIT within 5 years from the date of the original transfer.

The above tax measures are implemented by the enactment of a royal decree and are effective from 19 July 2022.

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