When can a Thailand BOI company start using tax exemption?

A lot of investors think that when the projects are approved and BOI certificates are issued by Thailand Board of Investment, their income starting from then on is exempted from tax which is not correct. In fact, the eligible promoted investors, who are entitled to use the right and BOI benefits in accordance to Section 31 concerning corporate income tax exemption can exercise their rights after having completed the following steps:

  1. The BOI company has completed the investment according to the condition of their Thailand BOI certificate. Some BOI companies are required to have the minimum investment (excluding cost of land and working capital) of at least 1 million Baht (or whatever the amount specified in the BOI certificate). Therefore, every receipt (from buying fixed assets or paying Thai Lawyers to set up the BOI company in Thailand) since the BOI application was submitted should be kept in order to count as part of the required investment.
  2. The BOI company has to file a form to open operation. This shall be done within 3 years from the date of issuance of Thailand BOI certificate, but after No. 1 above.
  3. The Board of Investment will inspect the company. The production process has to be proven that it complies with condition in the BOI certificate.

Once the project operation has been approved to open, the date on which the company issues the first invoice, shall be regarded as the first day of the 8 years (or 5 years, depending on what is granted in the certificate) corporate income tax exemption period. However, the income which is eligible for tax exemption must be from the promoted activities. For example, the income of software development activity must be from developing new software and selling the software which the company develops by its own personnel during the investment promotion period. It shall exclude income from advertisement, commission, consultation, etc. However, the BOI companies can only exercise their right for corporate tax exemption after it files a form which is signed by a Thai auditor (CPA).Consult with your Thailand BOI expert, Thai Lawyers Ltd. today. Please read our BOI testimonials here.