Investment incentives and measures in EEC
By virtue of the Investment Promotion Act, the Board of Investment (“BOI”) issued BOI Announcement No. 6/2018 dated 3 August 2018 offering higher tax privileges to private investors who conduct the business in the EEC area, which covers three provinces: Chachoengsao, Chonburi, and Rayong.
Keywords: Mazars, Thailand, Legal, EEC, BOI, Tax Privileges
02 October 2018
The tax privileges to be offered to investors under this announcement will be determined based on the zone in which the investor’s project is located, and upon meeting the following three criteria:
1. The investor must conduct business in the following targeted industries:
(1) Next-generation automobiles (2) Smart electronics (3) Agriculture and biotechnology (4) Food for the future (5) Automation and robotics | (6) Aviation and logistics (7) Biofuels and biochemicals (8) Digital (9) Medical hub
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For more details, please see the annexes attached to the announcement.
2. The investor must cooperate with educational institutions, research institutes, and the Center of Excellence in a manner approved by the BOI. For instance, cooperation in the areas of talent mobility, work-integrated learning, and dual vocational training. Meeting the existing requirements for human resources development in certain projects, such as an Innovation Incubation Center, is not sufficient to meet the conditions set out under the EEC measures.
3. The investor’s project must be located in Chachoengsao, Chonburi, or Rayong Provinces, and in any of the following designated zones:
A. Investment incentive zones for special activities (“Zone A”)
(1) Eastern Airport City (“EECa”)
(2) Eastern Economic Corridor of Innovation (“EECi”)
(3) Digital Park Thailand (“EECd”)
B. Investment incentive areas for targeted industries designated by the Eastern Economic Corridor Policy Committee currently consisting of the following 21 areas (“Zone B”):
(1) Hemaraj Chonburi Industrial Estate (2) Hemaraj Chonburi Industrial Estate 2 (3) Hemaraj Eastern Seaboard Industrial Estate (4) Hemaraj Eastern Seaboard Industrial Estate 2 (Chonburi) (5) Hemaraj Eastern Seaboard Industrial Estate 3 (Chonburi) (6) Eastern Seaboard Industrial Estate (Rayong) (7) Hemaraj Eastern Industrial Estate (Map Ta Put) (8) Hemaraj Rayong Industrial Estate 36 (Rayong) (9) Amata City Industrial Estate (10) Amata Nakorn Industrial Estate
| (11) Amata Nakorn Industrial Estate (2nd Phase) (12) Pin Thong Industrial Estate (Laem Chabang) Chonburi (13) Pin Thong Industrial Estate (3rd Phase) Chonburi (14) Pin Thong Industrial Estate (4th Phase) Chonburi (15) Pin Thong Industrial Estate (5th Phase) Chonburi (16) Pin Thong Industrial Estate (17) Yamato Industries Industrial Estate Chonburi (18) TFD Industrial Estate 2 Chachoengsao (19) C.P. Industrial Estate Rayong (20) Smart Park Industrial Estate (21) Hemaraj Eastern Seaboard Industrial Estate 4 |
C. BOI-promoted industrial estates or zones consisting of the following 19 areas (“Zone C”):
(1) 304 Industrial Park (2nd Phase) (2) Gateway Industrial Estate (3) Wellgrow Industrial Estate (4) Ban Bung Industrial Estate (5) Laem Chabang Industrial Estate (6) Sahaphat Industrial Estate (Sriracha) (7) Asia Industrial Estate (8) J.K. Land Industrial Park (9) IRPC Eco Industrial Zone (4th Phase) | (10) Rubber City Industrial Estate (11) Map Ta Put Industrial Estate (12) Pha Daeng Industrial Estate (13) Rayong Industrial Estate (Bangkai) (14) R.I.L Industrial Estate (15) Rojana Industrial Park (Bankai) (16) Rojana Industrial Park (Pluagdang) (17) Siam Eastern Industrial Park (18) SSP Industrial Park (Rayong) (19) WHA Rayong Industrial Land |
The tax privileges offering to qualifying investors in the EEC area are summarized in the table below:
Zones in the EEC | Incentives | For targeted industries in each EEC zone | For eligible activities in the EEC | ||||
Section 8* | A1* | A2* | A3* | Section 8 | A1-A3 | ||
A | Exemption from CIT* | 10+3 Years (no cap) | 8+4 Years (no cap) | 8+4 Years | 5+2 Years | 10+1 Years (no cap) | 5-8 Years (regular exemption) |
50% reduction in CIT | - | - | - | 5 Years | - | 3 Years | |
B | Exemption from CIT | 10+2 Years (no cap) | 8 Years (no cap) | 8 Years | 5 Years | 10+1 Years (no cap) | 5-8 Years (regular exemption) |
50% reduction in CIT | - | 5 Years | 5 Years | 5 Years | - | 3 Years | |
C | Exemption from CIT | 10+1 Years (no cap) | 8 Years (no cap) | 8 Years | 5 Years |
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50% reduction in CIT | - | 3 Years | 3 Years | 3 Years |
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Notes:
*"CIT" = corporate income tax
*"Section 8" refers to technology-based incentives for technology and innovation development, such as biotechnology, nanotechnology, advanced material technology, and digital technology.
*"A1" refers to knowledge-based activities focusing on R&D and design to enhance the country’s competitiveness.
*"A2" refers to infrastructure activities for the country’s development, activities using advanced technology to create added value, with no or very few existing investments in Thailand.
*"A3" refers to high-technology activities which are important to the development of the country, with a few investments already existing in Thailand.
Remarks:
1. Investors entitled to the rights and incentives under the EEC measures mentioned above cannot apply for merit-based industrial area development incentives under BOI Announcement No. 2/2014 issued on 3 December 2014.
2. Applications to receive the rights and incentives under these EEC measures must be submitted to the BOI by 30 December 2019.
For more information, please read BOI Announcement No. 6/2018 dated 3 August 2018.
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