Boosting Automation Investment through Tax Exemption

As of August 16th, 2023, the “Royal Decree Issued under the Revenue Code Regarding Tax Exemption (No. 776) B.E. 2566 (2023)” has taken effect, aiming to fortify automation initiatives on a national scale. This recent stride in taxation regulations holds the purpose of nurturing automation investment in Thailand.

Salient Features of the Royal Decree

In the light of this new decree, corporations and juristic partnerships stand to gain a significant advantage with a tax exemption provision designed to amplify investments in automation systems. Notable provisions include:

1.   Full Income Tax Exemption: Eligible entities are entitled to an income tax exemption equivalent to (100%) expenses incurred when investing in machinery and computer programs integrated into automation systems. This exemption encompasses actual expenses incurred from January 1st, 2021, to December 31st, 2025.

2.   Qualification Criteria: Qualification for the tax exemption entails adhering to the following criteria:

   Expenses must have a direct link to machinery and computer programs integrated into automation systems.

   Expenses related to repairs and maintenance for preserving the original state of these systems do not qualify for tax exemption.

   Machinery and computer programs must be suitable for asset depreciation, acquired in a ready-to-use state by December 31st, 2025.

Rationale Behind the Decree

This Royal Decree stems from the conclusion of the “Royal Decree Issued under the Revenue Code (738) B.E 2564 (2021)” on December 31st, 2022. The prior decree facilitated tax exemptions for companies investing in machinery and computer programs connected to automation systems. Acknowledging the pivotal role of automation in Thailand’s economic advancement, the government remains resolute in its drive to foster investment in this sector.

By extending tax exemptions, the government is actively fostering Thailand’s prominence in robotics and automation throughout the ASEAN region. This proactive position underscores the nation’s commitment to technological progress, aiming to lead the charge in innovation-driven advancement.

In closing, the issuance of “Royal Decree (No. 776) B.E. 2566 (2023)” constitutes a momentous leap towards invigorating investment in automation systems, aligning harmoniously with Thailand’s aspiration to be a frontrunner in regional automation and robotics leadership. This legal update is a valuable reference for corporations and juristic partnerships eager to leverage these tax advantages while contributing to the nation’s growth and technological prowess.

Disclaimer: This update serves only informational purposes and should not be construed as legal counsel. For inquiries or expert legal guidance on this matter, please reach out to our team at [email protected].

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