Thailand remodels tax incentives for investors
Thailand’s Board of Investment is changing its tax incentive structure for foreign investors as it shifts its investment focus away from cheap labour and assembling to value-added goods.
The current tax breaks will only last for less than 2 years from now, and by 2015, the country will end the current system of corporate tax breaks based on geography and replace it with another system that sets preference to specific industries and national priorities.
It is not yet clear what these priorities or preferences are, but it can be anticipated that car and electronics manufacturers, as well as food processors are among them. The corporate tax rate in Thailand currently stands at 20 per cent, and various tax rates apply, with the highest being an 8-year corporate tax holiday with a 50 per cent reduction for a further 5 years.
Thailand in 2013 introduced a new minimum wage of 300 baht (approximately $10) a day, making labour rates more expensive than in some other ASEAN countries. To accommodate the higher costs, companies now have to become more productive and sell higher valued goods.
Thailand's Board of Investment is changing its tax incentive structure for foreign investors as it shifts its investment focus away from cheap labour and assembling to value-added goods. The current tax breaks will only last for less than 2 years from now, and by 2015, the country will end the current system of corporate tax breaks based on geography and replace it with another system that sets preference to specific industries and national priorities. It is not yet clear what these priorities or preferences are, but it can be anticipated that car and electronics manufacturers, as well as food processors...
Thailand’s Board of Investment is changing its tax incentive structure for foreign investors as it shifts its investment focus away from cheap labour and assembling to value-added goods.
The current tax breaks will only last for less than 2 years from now, and by 2015, the country will end the current system of corporate tax breaks based on geography and replace it with another system that sets preference to specific industries and national priorities.
It is not yet clear what these priorities or preferences are, but it can be anticipated that car and electronics manufacturers, as well as food processors are among them. The corporate tax rate in Thailand currently stands at 20 per cent, and various tax rates apply, with the highest being an 8-year corporate tax holiday with a 50 per cent reduction for a further 5 years.
Thailand in 2013 introduced a new minimum wage of 300 baht (approximately $10) a day, making labour rates more expensive than in some other ASEAN countries. To accommodate the higher costs, companies now have to become more productive and sell higher valued goods.
