In a significant development for the automotive sector in Thailand, the Board of Investment (BOI) recently unveiled measures aimed at fostering investment in industries critical to national development. The announcement, issued on December 8, 2022, outlines key provisions tailored to support automotive industry operators and drive growth in the sector.
Eligible Business Scope for Investment Promotion:
The announcement expands the scope of business eligible for investment promotion to include:
1. General automobile manufacturing.
2. Electric car manufacturing, encompassing Battery Electric Vehicles (BEVs), Plug-in Hybrid Electric Vehicles (PHEVs), Hybrid Electric Vehicles (HEVs), and Electric Vehicle Platforms (BEV Platforms), with a particular emphasis on the production of Plug-in Hybrid Electric Vehicles (PHEVs) and Hybrid Electric Vehicles (HEVs).
Investment Terms:
Operators can apply for both original investment projects and new investment projects, subject to standards set forth by the Investment Promotion Committee. While the preferential treatment may vary slightly, the measures aim to provide equitable opportunities for all eligible projects.
Benefits of Investment Promotion:
The announcement offers several incentives to encourage investment in automation and robotics:
1. Corporate Income Tax Exemption:
✓ Eligible projects are entitled to a 3-year exemption from corporate income tax, covering 50% of the investment in automation and robotics (excluding land and working capital).
✓ For existing businesses, the tax exemption period is deducted from income after receiving the promotional card.
✓ New investment projects utilizing machinery supporting the domestic automation machinery manufacturing industry can benefit from a 3-year corporate income tax exemption based on the proportion of investment in automation and robotics. Specifically, not less than 30% of the modified machine value or total machine value is exempt from corporate income tax.
2. Import Tax Exemption:
✓ Machinery used in promoted projects is exempt from import tax, reducing the financial burden on operators.
Important Note:
To take advantage of these incentives, promotion applications must be submitted by the last working day of 2024. Additionally, projects must be completed within 3 years from the issuance date of the promotional card, ensuring timely execution and realization of investment benefits.
In summary, the BOI’s announcement represents a significant opportunity for automotive industry operators in Thailand to leverage incentives and drive innovation in the sector. By encouraging investment in automation and robotics, coupled with tax exemptions and import duty waivers, Thailand’s automotive landscape is poised for transformation and sustainable growth.