accountants and business advisers
08 Jun 2020
Due to the recent outbreak of coronavirus disease 2019 (COVID-19) in Thailand, the economic downturn has negatively affected various stakeholders and actors across the economy, especially in industrial and manufacturing sector. Consequently, many factory operators have been suffering from a decrease of income and increase of cost of production.
With due response, the Ministry of Industry has enacted the Ministerial Regulation on the Exempting Annual Fees for Factory Business Operators B.E. 2563 (2020) (the “Regulation”) pursuant to the Factory Act B.E. 2535 (1992) as amended by the Factory Act (No. 2) B.E. 2562 (2019) and the Factory Act (No. 3) B.E. 2562 (the “Act”). The enactment of this Regulation intends to release burdens and mitigate any economic impact caused to these factory operators by exempting annual fees for factories under Categories #2 and #3 of all sizes.
With reference to the existing factory regulations, factories in the Kingdom of Thailand are classified into three categories in accordance with type of factories and capacity of factory operation, such as mechanical power of the machines (in horsepower unit), amount of labor supply for the operation of the factory and other specific criteria prescribed by the Ministerial Regulation. This categorization is necessary for the purpose of effective supervision and control.
In this respect, all types of factories are specifically categorized into an official list for reference1. For introductory explanation, the categories #2 and #3 of factories that are exempt from annual factory license fees are summarized as follows:
(1) Factories under Category #2 are factories which are required to send notification to relevant officials prior to their operation. Upon such notification, the official shall issue notice of factory operation (Ror.Ngor.2) for the commencement of the factory operation. The example of factories under this category includes factories operating business of:
(2) Factories under Category #3 are factories which are required to obtain an issuance of factory license (Ror.Ngor.4) prior to the factory operation. The example of factories under this category includes factories operating business of:
In accordance with the Act, factory operators of Categories #2 and #3 are obliged to pay annual fees with the rate and procedure in accordance with the Ministerial Regulation for the entire period of factory operation. Nevertheless, with this newly enacted Regulation, this imposed annual fees are exempted for an applicable period of one year, as from the date of enforcement of this Regulation on 10th June 2020 to 9th June 2021.
The exemption under this Regulation, however, is not of an automatic application. The factory operators who wishes to be entitled with such exemption are required to have their official permits, which are the notice of factory operation (Ror.Ngor.2) for factories under Category #2 or the factory license (Ror.Ngor.4) for factories under Category #3, be affixed with an official seal from Department of Industrial Works or Provincial Industry Offices in the area where the factory is situated. After affixed with such seal for the purpose of the entitlement under this Regulation, the factory operators shall then be exempted from the imposition of annual fees.
1 For further reference, please see URL link: https://www.diw.go.th/hawk/data/factype.php
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