Tax incentives under the Investment Promotion Act
- Corporate income tax exemption on net profit and dividends from the promoted activity (Sections 31, 31/1 and 34)
- 50% reduction of corporate income tax (Section 35(1))
- Double deduction of transportation, electricity and water supply costs (Section 35(2))
- Additional 25% deduction of the cost of installing or constructing facilities, on top of normal depreciation (Section 35(3))
Corporate income tax exemption period by activity group
| Activity group | Corporate income tax exemption (basic incentive) |
|---|---|
| A1+ | 10–13 years, no cap |
| A1 | 8 years, no cap |
| A2 | 8 years, with cap |
| A3 | 5 years, with cap |
| A4 | 3 years, with cap |
| B | No corporate income tax exemption |
“No cap” means full exemption on profit from the promoted project for the stated period. “With cap” means exemption is limited to 100% of the project's investment as determined by the Board. The group for each business activity is set in the BOI's announcements and guide.
Extending the exemption to a maximum of 13 years
A project whose investment or expenditure on research and development (R&D) is at least 1% of sales in the first three years, or at least THB 200 million (whichever is lower), becomes eligible for exemption without a cap and for additional periods, up to 13 years in total, subject to the guide's conditions. For some groups the total exemption is limited to 8 years, except groups A1+, A1 and A2, which can reach 13 years.
Beyond R&D, the guide also offers extra incentives for human resource development and local supplier development under set criteria.
Extra incentives in target areas
Projects located in the 20 provinces with low per-capita income designated by the BOI receive three additional years of corporate income tax exemption. Activities in groups A1 and A2 instead receive a 50% reduction of corporate income tax on net profit from the promoted activity for 5 years after the exemption ends.
What to know before planning your taxes
- The exemption applies only to profit from the promoted activity, not to the company's other income
- Actual benefits depend on the activity group, conditions and the resolution in each project's promotion certificate
- BOI policy and announcements can change, so check the latest announcements before applying
Continue with the BOI application process and import duty privileges for machinery and raw materials.
Frequently asked questions
How many years of corporate income tax exemption does the BOI give?
It depends on the activity group: A1+ gets 10–13 years, A1 and A2 get 8 years, A3 gets 5 years and A4 gets 3 years. Group B gets no corporate income tax exemption. The total can reach at most 13 years, subject to conditions.
What is the difference between exemption with and without a cap?
Without a cap, profit from the project is fully exempt for the stated period. With a cap, the exemption is limited to 100% of the project investment as determined by the Board.
Does the exemption cover all of the company's income?
No. It applies only to profit from the promoted activity.
Source: Investment Promotion Guide 2025, Thailand Board of Investment. This is an overview for general information, not legal or tax advice. Actual rights depend on the activity type, conditions and the latest BOI announcements.