Considering that technology and innovation are key factors for strong economic growth and competitiveness, the government announced its vision of a new digital “Thailand 4.0” to transform Thailand into a knowledge-based economy. “Thailand 4.0” as an economic model essentially seeks to address the economic challenges faced by the nation as a result of excessive reliance on other industries in the past, namely agriculture (Thailand 1.0), light industry (Thailand 2.0) and advanced industry (Thailand 3.0). Significantly, the digitalization of the private sector may be a key step towards improving productivity and boosting economic growth.
As part of its aim to become ASEAN’s top data destination, Thailand’s Board of Investment (BOI) has sought to boost the competitiveness of the business environment in the country and facilitate equitable access to public sector data through digital technology. To this end, the BOI offers both tax and non-tax incentives to attract high value-add investments from local and foreign investors.
General Tax Incentives
1. Exemption of import duties on machinery, as well as raw or essential materials imported for use in production for export and for Research and Development (R&D).
2. 50% CIT reduction within 10 years.
3. Investment Tax Allowance (ITA) deduction up to 70% of the invested capital on net profit derived within 10 years.
Tax incentives for the Digital Industry
1. Software Development
A five to eight-year corporate income tax (CIT) exemption will be granted for digital services, enterprise software, digital content and high value-added software, except for e-commerce. Although e-commerce projects are not granted tax incentives, they may benefit from non-tax incentives.
A condition in this regard is that there must be a minimum expenditure of THB 1,500,000 for salaries of IT personnel, or a minimum investment of THB 1,000,000.
2. Digital Infrastructure
An eight-year CIT exemption will be granted for submarine cables, data centers and cloud services.
3. Digital Ecosystem Supported Business
A five to eight-year CIT exemption will be granted for makerspaces or fabrication laboratories, digital parks, innovation incubators, except for co-working spaces.
Co-working spaces are also one of the activities promoted by the BOI, as they are important for the startup ecosystem. Co-working spaces are thus entitled to non-tax incentives, notwithstanding that tax incentives are not granted. However, these spaces must have a minimum of 2,000 sqm and a space management system, customer relationship management system, as well as service personnel.
1. Permission to bring in expatriates.
2. Permission to own land.
3. Permission to take or remit foreign currency abroad.