On 7 June 2023, the Board of Investment (BOI) of Thailand approved rules that introduces a reduced tax rate. The objective behind this regime is to address the repercussions of the implementation of the global minimum tax rule. Under this scheme, eligible companies that qualify for tax exemptions through BOI incentives can benefit from a reduced corporate tax rate of 10%.
Companies eligible for the reduced tax rate regime are either members of groups with consolidated revenue of THB 28 billion or companies that are required to comply with Country-by-Country (CbC) reporting for the preceding accounting period. Companies that currently benefited from a tax exemption have the option to switch to a reduced tax rate regime for a duration that is twice the number of years remaining in their exemption, provided it does not exceed 10 years.
New applicants have the choice to apply either the tax exemption regime or the reduced tax rate regime. If the tax exemption regime is initially selected, the company can later convert to the reduced tax rate regime. The duration of the reduced tax rate regime for new applicants is twice that of the tax exemption period, which may vary based on the nature of the activity, with a maximum limit of 10 years.
