Thailand Law Library

by Thailand Lawyer

Chapter 3: Rights and Benefits

A promoted person shall be granted exemption of juristic person income tax on the net profit derived from the promoted activity as prescribed by an announcement of the Board, of which the proportion to the investment capital excluding cost of land and working capital shall be taken into consideration by the Board, for a period of not more than eight years from the date income is first derived from such activity.

In the case where activities are of special importance and benefit to the country as prescribed by an announcement of the Board, a promoted person in such activities shall be granted exemption of juristic person income tax on the net profit derived from the promoted activity for Amended by Amendment Act (No. 2) B.E. 2534 (A.D. 1991)

Amended by Amendment Act (No. 2) B.E. 2534 (A.D. 1991)
Amended by Amendment Act (No. 2) B.E. 2534 (A.D. 1991)
Amended by Amendment Act (No. 3) B.E. 2544 (A.D. 2001) period as prescribed by the Board but not more than eight years from the date income is first derived from such activity.

The income on which the computation of the net profit derived from the activity referred to under either paragraph one or paragraph two is to be based shall include income from the sale of such by-products and semi-manufactured products as the Board may deem appropriate.

In the case where a loss has been incurred during the period of receiving exemption of juristic person income tax referred to under either paragraph one or paragraph two, the Board may grant permission to the promoted person to deduct such annual loss from the net profits accrued after the expiration of the period of exemption of juristic person income tax for a period of not more than five years from the expiry date of such period. The promoted person may choose to deduct such loss from the net profit of any one year or several years.

The computation of the investment capital referred to under paragraph one shall be in accordance with the rules and procedures prescribed by an announcement of the Board.

In the case where the Board is of the opinion that, in granting promotion to any activity or applicant, it would be inappropriate to grant the exemption of juristic person income tax under section 31, the Board may grant promotion to such activity or applicant and the ones that follow without granting exemption of juristic person income tax.

Fees for goodwill, copyright or other rights from the promoted person according to the contract approved by the Board shall, in accordance with the rules are procedure prescribed by the Board, be exempted from computation of taxable income for a period of five years from the date the promoted person first derives income from the promoted activity.

Dividends derived from a promoted activity granted an exemption of juristic person income tax shall be exempted from computation of taxable income throughout the period the promoted person receives the exemption of juristic person income tax.

For the purpose of promoting investment in certain locations or zones, the Board may prescribe, by publication in the Government Gazette, such locations or zones as Investment Promotion Zones.

Apart from the rights and benefits referred to in other sections herein, the Board shall have the power to grant a promoted person operating the promoted activity in such locations or zones prescribed under paragraph one, one or more special rights and benefits as follows:

1. A fifty per cent reduction of the normal rate of juristic person income tax on the net profit derived from the promoted activity for a period of not more than five years commencing from the _ Amended by Amendment Act (No. 3) B.E. 2544 (A.D. 2001) expiry date referred to under either paragraph one or paragraph two of section 31, or from the date income is first derived from the promoted activity in the case where the promoted person is not granted exemption of juristic person income tax;
2. Permission to deduct for the purpose of assessing juristic person income tax an amount double the costs of transportation, electricity and water supply incurred by the promoted person in the operation of the promoted activity, subject to such conditions, procedures and periods of time as shall be prescribed by the Board;
3. Permission to deduct from the net profit an amount not exceeding twenty-five per cent of the cost of installation or construction of facilities used in the promoted activity according to the rules prescribed by the Board, under which the promoted person may, in addition to normal depreciation, choose to make such deductions from the net profit of any one year or several years within ten years from the date income is first derived from the promoted activity.

For the purpose of promoting exports, the Board may grant the promoted person one or more of the special rights and benefits as follows:

1. exemption of import duties on the raw and essential materials imported for use specifically in producing, mixing, or assembling products or commodities for export;
2. exemption of import duties on items which the promoted person imports for re-export;
3. exemption of export duties on products or commodities which the promoted person produces or assembles;
4. permission to deduct from the assessable income for payment of juristic person income tax an amount equal to five percent of the increased income over the previous year, derived from the export of products or commodities produced or assembled by the promoted person, exclusive of overseas insurance and freight charges.

The foregoing shall be in accordance with such conditions, procedure and periods of time as shall be prescribed by the Board.

A promoted person, or an investor in the promoted activity whose domicile is outside the Kingdom, shall be granted permission to take out or remit abroad money in foreign currency if it represents

1. an investment capital which the promoted person brought into the Kingdom and dividends or other returns on such capital; Amended by Amendment Act (No. 2) B.E. 2534 (A.D. 1991)
2. a foreign loan under a contract approved by the Board which the promoted person brought in to invest in the promoted activity, including the interest thereon;
3. a payment for a foreign obligation of the promoted person under a contract for the use of rights and services relating to the promoted activity, provided that such contract was approved by the Board.

During any period when there is an adverse balance of payments which requires the preservation of foreign currency at a reasonable level, the Bank of Thailand may temporarily restrict the remittance abroad of such money, but the restrictions shall not cause the remittance of foreign capital to be less than twenty percent annum, provided that such remittance is made two years after the capital has been brought in, and the dividends to be lower than fifteen percent per annum of the capital brought into the Kingdom.