Thailand BOI – Promoting improvement in production efficiency for manufacturing business by upgrading technology and machinery

In the previous article, we outlined the recently announced measures to promote energy conservation, alternative energy utilization or reduction of environmental impact. Today, we outline the measures to promote improvement in production efficiency by upgrading technology and machinery for manufacturing as follows:-

2.1 This measure is applicable to existing projects only, whether a BOI or non-BOI promoted.

2.2 BOI-promoted projects can also apply for this measure when the corporate income tax exemption or reduction period expires or in case the projects do not receive the corporate income tax exemption.

2.3 The minimum capital investment requirement of each project must not be less than 1 million Baht (excluding cost of land and working capital). This requirement does not apply to Small and Medium Enterprise (SMEs) projects. The minimum capital investment requirement of each SME project must not be less than 500,000 Baht (excluding cost of land and working capital).

2.4 The Small and Medium Enterprise (SME) project qualifications are:

2.4.1 The total capital investment (excluding cost of land and working capital) of all of the applicants BOI and non-BOI promoted projects combined must not exceed 200 million Baht.

2.4.2 Thai Nationals must hold shares totaling not less than 51 percent of the registered capital.

2.5 The applicant must submit an investment plan for machinery change or upgrade according to the stipulated criteria. For instance, the upgrading of a production line to an automated system for production efficiency improvement.

2.6 The following incentives shall be granted:

2.6.1 Exemption of import duty for machinery regardless of zone.

2.6.2 Three –year corporate income tax exemption on the revenue of an existing project, accounting for 50 percent of the investment under this measure, excluding cost of land and working capital of the upgrading process.

2.6.3 Corporate income tax exemption period shall start from the date of revenue derivation after promotion certificate is issued.

2.7 Application shall be submitted by December 31, 2017 and project must complete the implementation within three years from the date the promotion certificate is issued.

2.8 Application of existing projects of all investment sizes under this measure shall be considered by the Office of the Board of Investment.

The next article will outline the measure to promote the investment on research and development and advanced engineering designs for efficiency improvement.

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