Thailand: Tax incentives to encourage personnel development, foreign investments

Tax measures that would support human resource development for “Industry 4.0”

Tax measures that would support human resource development for “Industry 4.0”

The Thai Cabinet on 25 May 2021 approved the principles for four draft Royal Decrees regarding tax measures that would support human resource development for “Industry 4.0” and that would provide tax incentives under the “Thailand Plus Package” to encourage foreign investors to relocate their production bases to Thailand.

For companies or juristic partnerships, these tax measures would provide tax exemptions or additional tax deductions on certain expenses incurred in the two-year period, from 1 January 2021 through 31 December 2022.

In general, the incentives would provide:

  • An additional deduction of 200% of expenses incurred through the donation of machines, equipment, and computer software for an Industry 4.0 automatic system when donated to a center founded by a government educational institution, private university or private school for the period 1 January 2021 through 31 December 2022. There also would be exemptions from value added tax (VAT) and corporate income tax for these donations when the cost of donated assets is not required to be included as a deductible expense for the calculation of taxable profits. 
  • An additional deduction of 100% of expenses incurred through investments in automatic machines and software used for the automated systems investment project.
  • An additional deduction of 50% of expenses incurred from the payment of salaries, not exceeding a maximum salary of THB 100,000, paid to highly skilled employees in the areas of science, technology, engineering and mathematics for persons employed between 1 January 2021 through 31 December 2022.
  • An additional deduction of 150% of expenses incurred from sending employees on training courses certified by specified authorities.

The Royal Decrees and supplementary regulations associated with these measures are expected to be announced soon.

Read a June 2021 report prepared by the KPMG member firm in Thailand


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