A Royal Decree (No. 784) dated 5 June 2024 and a notification from the Director-General of the Thai Revenue Department on income tax (No. 447) dated 24 July 2024 were issued to provide two tax incentives:
1) Reduction of withholding tax rate at 3 percent for an assessable income derived by skilled employees or experts hired to work in the business operation located in an SEZ during the period from 1 January 2024 through 31 December 2026. Such income shall be excluded from the income tax return, given that the there is no request for a refund or credit with respect to the tax withheld.
To qualify to receive the rate reduction, skilled employees must satisfy conditions as follows:
- Have at least bachelor’s degree, Higher Vocational Certificate, Technical Vocational Certificate, or equivalent.
- Qualified under the National Skill Standard Test Level 2 in each filed according to the Skill Development Promotion Act.
- Have work experiences which related or benefited to the position under the employment contract for not less than 5 years which supported by the certificate of employment or any documentary evidence to verify the working experience.
To qualify to receive the rate reduction, experts must satisfy conditions as follows:
- Have at least bachelor’s degree, or equivalent.
- Have work experiences which related or benefited to the position under the employment contract for not less than 8 years which are supported by the certificate of employment or any documentary evidence to verify the working experience.
2) An additional corporate income tax deduction for investments made during the period from 1 January 2024 through 31 December 2026 in companies or partnerships operating in an SEZ.
To qualify for the additional corporate income tax deduction, taxpayers must follow rules and procedures and fulfill conditions as follows:
- Must not have had any place of business in an SEZ for at least one year prior to the investment
- Shares or partnership interests of a company or juristic partnership with business operating in SZE must not be sold or transferred, except in cases where there are justifiable reasons. Such justifiable reasons may include the sale or transfer of shares or partnership interests due to the company’s or juristic partnership’s intention to increase capital. In such cases, it may be necessary to sell or transfer some shares or partnership interests to another company or juristic partnership that does not have an establishment in the SZE, so that the other company or juristic partnership can purchase shares or become a partner in the company or juristic partnership operating in the SZE with respect to the capital increase