On 4th November 2020, the Thailand Board of Investment (“BOI”) has resolved to approve the incentive measures to accelerate the development of electric vehicles (“EV”) production and related supply chain in Thailand, with a focus on battery electric vehicles (“BEVs”), local production of essential parts, and the inclusion of commercial vehicles of all sizes as well as ships.
The new incentive measures approved to support three manufacturing activities related to EV’s supply chain as follows:
Manufacture of EV
In 2017, BOI has previously launched a measure under Announcement No. 5/2560 to promote the EV manufacturing activities, and the application deadline of which has been overdue since 2018. With the relaunch of this promotion package for EV business, BOI has offered a more extensive range of the eligible types of vehicles, as summarized below.
| Types of vehicle | BOI Incentives | |
| 1. Passenger Cars | Battery Electric Vehicles (BEV) | · Total investment exceeding 5 billion Baht:8-year corporate income tax exemption, extendable in case of R&D investment· Total investment less than 5 billion Baht:3-year corporate income tax exemption, extendable upon fulfillment of additional requirements such as production commencement by 2022, additional part production, minimum production of 10,000 units within 3 years, and R&D investment |
| Plug-in Hybrid Electric Vehicles (PHEV) | 3-year corporate income tax exemption, if manufacturing at least 3 parts for EV passenger car | |
| 2. Motorcycles, Three-Wheelers, Buses, and Trucks | 3-year corporate income tax exemption, extendable upon fulfillment of additional requirements such as production commencement by 2022, production of battery modules, production of essential parts (i.e. traction motor), and R&D investment | |
| 3. Electric-Powered Ship | 8-year corporate income tax exemption for vessels with less than 500 gross tonnage |
Manufacture of EV Parts
The new package also expands the scope of manufacturing activities of EV parts under Activity Category No. 4.8.3 to include additional four parts, which are (i) High Voltage Harness, (ii) Reduction Gear, (iii) Battery Cooling System, and (iv) Regenerative Braking System. With this package, the applicant will grant 8 years corporate income tax exmptions.
Manufacture of EV Battery
EV battery manufacturers in Thailand who invested in technology for the manufacturing process of battery modules or battery cells for a local market shall be entitled to a 90% reduction of import duties for 2 years on raw or essential materials not available in Thailand.
Concluding Remarks
With BOI incentives, business operators in these areas can re-harvest the expected benefit therefrom. Nevertheless, details of these newly launched measures cannot yet be confirmed nor deliberately analyzed until the official Announcement from BOI is enforced, which is pending on their final resolution.
If you have any comments or questions regarding the article or any matters discussed herein, or if you are interested in finding out more about PKF Tax and Consulting Services (Thailand) Ltd., please contact any of the persons below:
Thanyaluck Thongrompo| Partner | Legal & Tax Services
Tel. +66 (0) 2 108 1591 Ext. 104
Mobile. +66 (0) 98 119 8418
Sirapat Chaisarnseri| Manager | Legal & Tax Services
Tel. +66 (0) 2 108 1591 Ext. 135
Mobile. +66 (0) 97 157 0578
Napas Udomratanasirichai| Associate | Legal & Tax Services
Tel. +66 (0) 2 108 1591 Ext. 114
Mobile. +66 (0) 85 923 8568
