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Thai Corporate Tax Exemption with Board of Investment (BOI) Certification

Transcript of the above video:

In this video, we're going to be discussing the board of investment or BOI. Specifically, we're going to be talking about tax exemption status under the BOI. The first thing that should be understood is the Board of Investment can confer benefits onto operators wishing to do business in the Kingdom. Those benefits vary widely depending on how the BOI determines that benefit should be conferred but notably BOI certification can allow for foreign nationals or foreign companies to operate and own a hundred percent of their operation here in the Kingdom provided the certification allows for that ownership. Another thing under BOI, there are various immigration benefits and some other things and land ownership benefits as well in certain industrial estates etc.

But the thing to keep most in one's mind with respect to BOI in this video is tax exemption. Pursuant to the BOI’s mandate, they are allowed to provide basically tax holidays to certain types of companies. Now this should be noted as there's a misconception with foreign nationals who are doing business in Thailand as some believe that BOI certification always confers tax exemption status. That is not the case. Tax exemption has to be specifically granted as do specific benefits under the BOI. Even immigration benefits and other things like that have to specifically be granted by BOI in order for the benefits to be conferred. So in most cases with respect to tax exemption status, this is only going to be granted in those types of businesses that the BOI is especially sort of anxious to go ahead, I guess I should say is especially interested in having those types of businesses invest and operate here in the Kingdom.

At present, very tech oriented types of companies are very much what the the BOI would like to see transferring here into Thailand and operating here in Thailand. BOI certification, a tax exemption status it's usually issued in increments of five or eight years. It's very rare in my experience. Never see tax exemption status issued past eight years although I guess it's technically possible. But one of the reasons again for issuing the tax exemption or granting it is due to the fact that they really want to encourage certain types of businesses that they feel are not overly well represented here in the Kingdom or would bring significant benefit in terms of job creation, technology transfer expertise, transfer etc. that they believe would bring that here to the Kingdom. So it's something that's worth noting that it's very important for the BOI to assess the type of business that the company in question wishes to do in the Kingdom and then upon the assessment, we'll make a decision as to whether or not to allow for tax exemption.

It should also be noted that there are certain types of businesses where one specific activity being received BOI certification but they may be engaged in other side things that are not specifically approved for tax exempt status. And in those cases it’s going to probably be advisable to go ahead and do certain bookkeeping and accounting, take certain bookkeeping and accounting measures in order to keep separated the exempt income from the non-exempt income. But we're getting a little bit too detailed or more detailed and I really want to get in this video the thing to take away from this is yes, tax exemption is possible. No, not all BOI certified companies are going to be granted tax-exempt status. Tax-exempt status tends to only be granted in five year increments and tax-exempt status tends to only be granted to those companies or the types of endeavors which the BOI wishes to encourage here in the Kingdom and therefore not all types of endeavors although they may receive BOI certification for purposes of things like foreign business licensure and for purposes of things like immigration benefits, they may not receive exemption from the tax system.