InfoQuest, (September 22, 2019) -- According to Ms. Duangjai Asawachintachit, secretary-general of The Board of Investment (BOI) of Thailand, Thai Prime Minister and Defense Minister Prayut Chan-o-cha presided over the BOI meeting, at which investment promotion measures under the Thailand Plus Package approved by the Economic Cabinet on September 6, 2019 were adopted, which mainly consist of the following two measures:
1. The additional preferential measure to accelerate investment, attract foreign investment and stimulate large-scale investment projects in target industries. Enterprises in target industries can be exempted from corporate income tax for 5-8 years, and enterprises located outside Bangkok can enjoy a 50% reduction in corporate income tax for additional five years.
The above investment promotion projects must be submitted within 2020, with an actual investment in 2021 not less than 1 billion baht.
2. The additional measure to promote the development of human resources and improve the quality of labor forces, which is also an important factor influencing the investment decisions of investors. The Thailand BOI approved measures to encourage enterprises to train employees and participate in pre-employment student training, including encouraging enterprises to establish STEM (science, technology, engineering and mathematics)-related vocational training and education institutions. They mainly include the following two measures:
1) The measure to support training. The investment or expenditure related to human resources development can be included in the calculation of corporate income tax relief. There is no lower expenditure limit for the following two situations:
Situation 1: Where the enterprise organizes training or internship activities in the form of bilateral education, cooperative education or Work-Integrated Learning to improve students' technical skills, the relevant training investment and expenditure can be deducted from the enterprise income tax.
Situation 2: Where the enterprise organizes training or sends employees to the technical projects of targeted training and certification of the Ministry of Higher Education, Science, Research and Innovation or the Eastern Economic Corridor (EEC) Policy Committee Office, the relevant training investment and expenditure can be deducted twice from the corporate income tax.
Enterprises should apply for preferential rights and interests within 2021 and before the end of the preferential measures for corporate income tax relief.
2) The measure to support the private sector in establishing institutions for training high-skilled personnel. Enterprises (parent companies) operating businesses other than education and training institutions that invest in the establishment of education or vocational training institutions for developing high-skilled STEM personnel upon the approval of the Ministry of Higher Education, Science, Research and Innovation can be exempted from corporate income tax for 5 years with 100% of the investment in the establishment of education or vocational training institutions, and be exempted from import duties on related equipment.
The above investment promotion projects must be submitted within 2021, and the main business of the applicant must be the type of business currently given preferential measures by the BOI.
In addition, the meeting passed a resolution to designate Chana District, Songkhla Province as the fourth model city according to the investment promotion policy of the model city project, so as to increase the economic ties with Malaysia, Singapore and other countries and support the industrial development of the southern border provinces.
Chana District will enjoy the same preferential rights as the three demonstration cities of Nong Chik District in Pattani Province, Betong District in Yala Province, and Su-ngai Kolok District in Narathiwat Province, including being exempted from corporate income tax for up to 8 years for new projects and up to 5 years for existing projects. Besides, Chana District will receive preferential rights different from other demonstration cities, such as a 90% reduction in import duties for a period of 10 years when importing necessary materials and raw materials for domestic production.
Source: InfoQuest, by Tanit Tongnok / Nisarat / Rachada, translated by Xinhua Silk Road
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