According to the Thailand Board of Investment (BOI) Announcement, there are approvals on incentives to encourage businesses to decrease their carbon footprint. In addition, adoptions of a better electric vehicle plan and action aim to alleviate COVID-19 consequences. It also encourages the development of local vaccines. On 6 September 2021, the BOI Secretary-General, Mrs Duangjai Assawachintachit, made the announcements.
BOI Thailand Initiatives to promote BCG Model
A series of promotion measures aiming to encourage investments got BOI approval. Additionally, they aim to lower environmental impact, support sustainable development, and contribute to the development of the BCG model (Bio, Circular, and Green Economy). The Royal Thai Government prioritizes BCG Model as a key component of the post-Covid 19 recoveries.
These measures comprise the following:
1) Local organisations seeking the promotion of sustainable agricultural activities will benefit from the grassroots economy assistance plan. This new component will inspire competent businesses to join the sustainable agriculture movement. Furthermore, the deadline for applying for the grassroots economy support plan will be until the end of 2022.
2) Investments in machinery modifications to reduce greenhouse gas emissions will be eligible for three-year tax breaks. This will be in addition to the current productivity-improvement programme. This new regulation can help the government meet its greenhouse gas reduction targets.
3) Adjustments to the conditions and benefits applying to some business categories to encourage eco-friendly technologies:
- Investments in cold storage facilities and cold storage transport operations using natural refrigerants, that reduce the impact on the environment, will be granted 3-year corporate income tax exemptions.
- Petrochemical production facilities implementing Carbon Capture Utilization and Storage (CCUS) technologies will receive 8-year corporate income tax exemptions.
4) The creation of a new promotion category for natural gas separation plants that will receive an 8-year corporate income tax exemption if they use CCUS technologies.
BOI Thailand Initiative to boost EV Manufacturing
BOI aims to improve the investment promotion strategy for the manufacture of all sorts of electric vehicles (EVs). Additionally, it has the goal of boosting the EV industry, which is one of the target industries. The investment promotion will also include the development of BEV platforms. Furthermore, this will include an energy storage system, a charging module, and front and rear axle modules.
In general, a platform accounts for at least 70% of a BEV’s entire cost. The concept of a sharing platform is a new trend in the automotive business. This sort of manufacturing, in particular, will enable greater flexibility, a quicker time for product creation, and cost savings. Given the relatively small local and regional markets for BEVs, manufacturing that lowers unit costs will help BEVs compete better and expand the market faster.
In addition, the BOI approved the marketing of electric bicycles (E-bikes). This activity and industry have shown fast market growth in recent years. There is a minimum of three years of corporate income tax exemption in the tax advantages. These items will round up the BOI’s electric vehicle promotion programme.
BOI Thailand Measures for Covid Impact Mitigation
The BOI allows relaxation and waivers of certain investment restrictions in order to mitigate the impact of the coronavirus pandemic on eligible firms. During the period of April 1-December 31, 2021, the board agrees to extend the deadlines for enterprises requiring to be International Standards certification like ISO 9002 or CMMI by six months. Companies can also request waivers for temporary cessations of operations for more than two months throughout the same time period.
The Board approves a measure that allows companies that are still eligible for tax breaks to apply for additional tax breaks. It is possible if they provide financial support to vaccine/medicine research and development projects. Such projects can be run by public educational institutions and research institutes, as well as government agencies. Additionally, it must be an effort to support local vaccine/medicine development and production.
They will receive an additional 1-3 years of corporate income tax exemption and an increase in their corporate income tax exemption ceiling equal to the amount of their contribution if the aforementioned support is worth at least 1% of total sales in the first three years, or at least 200 million baht (USD7 million). Companies can still receive an increase to their corporate income tax exemption maximum if the payment does not reach this threshold, but not additional years of tax vacations.
If you think that your business is having the element to reduce carbon footprints in Thailand, be assured that you will attract BOI Thailand attention or good. For help and support in this regard, mail us at [email protected].
