On 4 November 2020, the Board of Investment (BOI) announced that it will reinstitute investment promotions for the development and production of electric vehicles, as well as approve new incentives for business activities related to clinical research and senior care.
Clinical Research
To enhance Thailand’s competitiveness in the medical and healthcare industry, the BOI approved an 8 year corporate income tax exemption for the following business categories:
1. Contract Research Organizations; and
2. Clinical Research Centers.
There is no limit on the amount of the exemption for the eight year exemption period.
To be eligible, the project must:
1. Spend a total of at least 1.5 million Baht per year on the salaries of newly hired researchers who are Thai nationals; and
2. Have an investment capital of at least 1 million baht (excluding the cost of working capital, land, and vehicles).
Senior Care Services
Businesses who perform senior or dependent care services may now be eligible for tax exemptions through the BOI.
1. Senior care hospitals with a capacity of at least 50 beds may enjoy a 5-year corporate income tax exemption; and
2. Senior or dependent care service providers with a capacity of at least 50 beds and 51% Thai ownership of capital may receive a 3-year corporate income tax exemption.
Electric Vehicles
The BOI has announced new investment packages for businesses which manufacture electric vehicles, essential parts, or batteries. The package will replace previous investment measures which expired in 2018.
Manufacture of electric vehicles (EV)
1. Manufacture of EV passenger cars
✓ Battery Electric Vehicles (BEV)
Projects with an investment capital of 5 million Baht or more will receive an 8-year corporate income tax exemption, with the ability to extend if there is R&D investment.
Projects with an investment capital of less than 5 million Baht may enjoy a 3-year corporate income tax exemption, with the ability to extend if the project fulfills certain criteria (e.g., if production commences within 2022, additional part production, minimum production of 10,000 units within 3 years, and R&D investment/expenditures).
✓ Plug-in Hybrid Electric Vehicles (PHEV)
PHEV projects that manufacture at least three parts for EVs will enjoy a 3-year corporate income tax exemption.
2. Manufacture of EV motorcycles, three-wheelers, buses, and trucks
✓ The project will be entitled to a 3-year corporate income tax exemption, with the ability to extend if the project fulfills certain criteria (e.g., if production commences within 2022, additional part production, minimum production of 10,000 units within 3 years, and R&D investment/expenditures).
3. Manufacture of EV ships
✓ An 8-year corporate income tax exemption will be granted to projects producing vessels with less than 500 gross tonnage.
Manufacture of EV parts
The BOI has approved incentives for four more categories of EV parts under BOI Activity Category No. 4.8.3, namely:
✓ High voltage harnesses;
✓ Reduction gear;
✓ Battery cooling system;
✓ Regenerative braking system.
Producers of these parts will be eligible for an 8-year corporate income tax exemption.
Manufacture of EV batteries
Manufacturers of battery modules and battery cells for the Thai market will be eligible for a 90% reduction of import duties for 2 years on raw or essential materials not available locally.
Additional details on the incentive measures are expected to arrive with future BOI announcements.
