On September 16, 2021, Thailand’s Board of Investment (BOI) announced the consolidation of its list of promoted digital activities into a single new category for development of software, platforms for digital services, or digital content (5.10). When Announcement No. Sor. 4/2564 came into effect the following day, the new category subsumed and replaced the previous categories of “software” (5.7), “e-commerce” (5.8), and “digital services” (5.9).
The new category is entitled to A2-level incentives, which include a capped eight-year corporate income tax (CIT) exemption along with other tax and non-tax incentives. For this category, the BOI has specified two extraordinary allowances rarely seen in other promotional categories. The first is that the cap calculation for the annual CIT exemption is based on the actual amount of prescribed expenses (e.g., 100% of remuneration to Thai IT personnel and 200% of their training costs). The second is that the BOI will allow investment projects under this category to include used machinery.
To be eligible for BOI promotion under the new digital activity category, projects must:
- hire new Thai IT personnel whose annual salary expenses combined equal at least THB 1.5 million (approximately USD 44,275); and
- have a development process for the software, platform for digital services, or content to be carried out in Thailand under BOI approval.
Investment projects under this new category are not eligible for additional merit-based incentives or for investment promotion measures for small and medium enterprises (SMEs).
Projects that qualify for CIT exemption must derive their revenue from sales or services directly related to the software, platforms for digital services, or digital content developed under BOI promotion. In addition, the BOI specifies that retail or wholesale business (e.g., the sale of goods through the platform) is not covered by the new category and therefore is not considered a BOI-promoted activity.
Companies seeking BOI promotion that also wish to apply for the Eastern Economic Corridor (EEC) scheme for human resources development must notify the BOI when submitting the promotion application. Once a promoted project has been approved, that request cannot be amended.
