The Thailand Board of Investment (BOI), during its meeting on 6 September 2021, approved incentives to encourage companies to reduce greenhouse gas emissions. At the same meeting, it also approved measures to mitigate COVID-19 impacts and support local vaccine development.
BOI Secretary-General Duangjai Asawachintachit summarized the following major issues considered by the BOI meeting, chaired by Prime Minister and Defense Minister General Prayut Chan-o-cha.
Concerning measures to encourage greenhouse gas reduction, promotion measures were approved to encourage investments that would reduce environmental impacts, support sustainable development, and help in the development of the BCG (Bio-Circular-Green Economy) model.
In these measures, the grassroots economy support scheme will also cover the support to local organizations involved in the development of sustainable agricultural activities, such as low-methane rice farming. Moreover, the deadline for applications under the grassroots economy support scheme will be extended to the end of 2022.
Three-year tax holidays will be offered for investments in upgrading machinery, aimed at reducing greenhouse gas emissions. This new measure is expected to contribute to the country’s commitments on greenhouse gas reduction.
The conditions and benefits applying to some business categories to encourage eco-friendly technologies will be adjusted as follows:
– Investments in cold storage facilities and cold storage transport operations using natural refrigerants that reduce the impact on the environment will be granted three-year corporate income tax exemptions;
– Petrochemical production facilities implementing Carbon Capture Utilization and Storage (CCUS) technologies will be granted eight-year corporate income tax exemptions.
The meeting also agreed to improve the investment promotion policy for the production of electric vehicles (EV) of all types, in order to further boost the EV sector, which is one of the country’s target industries.
Regarding further COVID-19 impact mitigation measures, the BOI agreed to extend for six months the deadlines for companies required to be certified by international standards, such as ISO 9002 or CMMI, from 1 April to 31 December 2021. In the same period, companies may also apply for waivers for temporary cessations of operations for a period of more than two months.
The BOI also approved the measure to allow companies that still enjoy tax holidays to apply for additional tax incentives if they provide financial support to vaccine/medicine research and development projects run by public educational institutions and research institutes, as well as government agencies. If the financial support is worth at least 1 percent of total sales in the first three years, or at least 200 million baht (USD 7 million), 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. In case the contribution does not reach this threshold, companies can still receive an addition to their corporate income tax exemption ceiling, but not additional years of tax holidays.
Source: The Government Public Relations Department