Tax Guides

Tax ID Registration

In the past, within 60 days from incorporation or start of operations you had to register with the Revenue Department in order to obtain a corporate tax ID.
This application is not required anymore, because the company registration number will be used as a tax ID number. Only foreign entities operating business activities in Thailand must register with the Revenue Department and obtain the tax ID number.

Value Added Tax (VAT) Registration

Business operators earning more than 1,8 million Baht per annum must register for VAT in Thailand within 30 days after the threshold has been reached.
However, in order to maintain a valid Non Immigrant B visa and therefore a valid work permit, embassies and consulates require a copy of the company’s VAT registration, so you better get one before the registration of the business.

Reporting requirements:
A company is required to file monthly VAT reports from the day of registration, also in case there are zero VAT invoices that month. Firms must keep books and follow accounting procedures specified. Documents may be prepared in any language, provided that a Thai translation is attached.

Value Added Tax (VAT)

The value added tax (VAT) system, which came into effect on 1st of January 1992, largely replaced the old business tax system, which critics claimed caused inefficient redundancies and facilitated tax evasion. The value added tax rate is ten percent, but has been reduced to a seven percent until 30 September 2018.

Those who are affected by this tax are traders, manufacturers, importers, exporters, wholesales, retailers, wholesalers and persons or legal entities that provide services under a registered business or in a professional capacity.

Any person or legal entity that has an annual turnover exceeding 1.8 millions Baht is required to enter into the VAT system. VAT registration must be made within 30 days of reaching the income threshold. A business may opt to register for VAT, regardless of turnover. A VAT registration is a precondition of employing foreign labour.

VAT Categories

1. VAT Exempt

Certain type of supply are exempt from VAT, including:
• Supplies made by entities with an annual turnover not exceeding 1.8 millions Baht
• Sales or import of unprocessed agricultural products and related goods such as fertilizers, animal feeds, chemicals
• Sales or import of newspapers, magazines and textbooks
• Certain industries
• Educational
• Artificial and cultural
• Medical, audit and lawyer practice services
• Research, library, museum, zoo, employment of labour, amateur sports and public entertainers
• Domestic and international transportation by way of land
• Real estate rental
• Service provide by local government authorities
• Sales of goods or services to Thai ministry, departmental, department
• Sales of goods or service to religious institutions

2. Zero Rated

The supply of certain goods and services attract a zero VAT rate. These include:
• Exports of goods and services provided in Thailand and utilized outside Thailand in accordance with the rule, procedure and conditions of Revenue Code
• International transportation by air or sea
• Sales goods and services to Thai government or state enterprises under loan or aid programs
• Sales goods and services to the United Nations agencies, embassies and consulates
• Sales goods and services between bonded warehouses and between operators located in EPZs

3. 7% Rated

The majority of goods and services are subject to VAT when sold domestically by a VAT-registered supplier.

VAT is typically calculated at 7% of the sales value including excise taxes (if any).

4. Customs VAT
Where imported goods are no exempt or subject to zero rates of VAT, VAT will be levied by the Royal Thai customs department. VAT on imported goods is calculated at 7% of the total of the CIF value, plus excise tax, plus import duties and other taxes and fees (if any)

5. Imported Service VAT
Services utilized in Thailand supplied by foreign service providers are also subject to 7% VAT in Thailand. In such a case, service recipient in Thailand is obliged to file VAT return (PP.36) on behalf of the service providers. This tax is applied at the point of payment.

VAT Calculation

Output tax – input tax = tax payable, where output tax is the VAT which the operator collects from the purchaser when a sale is made, and input tax is the VAT which an operator pays to the seller of a goods or service which is then used in the operator’s business. Unused input tax can creditable against output tax within the next 6 months

If the result of this calculation is a positive figure, the operator must submit (PP. 30) the remaining tax to the Revenue Department not later than 15 days after the end of each month. However, for a negative balance, the operator is entitled to a refund in the form of cash or a tax credit. A claim for a tax refund must be made within 3 years.

A VAT registered trader must be able to issue proper tax invoices, failure to do so will result in penalties and potential criminal liabilities.

VAT Refunds

Tax Matters – Value Added Tax Vat Refunds Tax Thailand Bangkok

Problems with VAT refunds persist. The Revenue Department has acknowledged that irregularities with paperwork has held up more than six billion Baht in refunds, and that there are a number of concerted efforts to defraud the government through illegitimate tax refund claims.

The Revenue Department has thus committed to directly assist companies having problems with VAT refunds and to point out irregularities in documentation. From June 1, 1999, tourists shopping in Thailand have been able to obtain VAT refunds as a part of the country’s tourist promotion policy.

Corporate Income Tax (CIT)

Incorporated firms operating in Thailand generally pay income tax at a rate of 23 percent of net profits, although reduced tax rates apply to companies listed on the Stock Exchange of Thailand (SET) and the Market for Alternative Investment (MAI). Small companies pay taxes at reduced rates on a progressive scale on profits below 3 million Baht. Temporary exemptions from corporate income can be applied for in certain circumstances. Foundations and Associations pay income taxes at rates of 2 to 10 percent of gross business income, depending upon the activity. International transport companies face a rate of three percent of gross ticket receipts and three percent of gross freight charges.

All companies registered under Thai law are subject to taxation as stipulated in the Revenue Code and are subject to income tax on income earned from sources within and outside of Thailand. Foreign companies not registered or not residing in Thailand are subject to tax only on income derived from sources within Thailand.

Normal business expenses and depreciation allowances, under accrual accounting are allowed as deductions from gross income. Double-deductions are available for qualifying R&D and training expenditure. Inventory must be valued at cost or at market price, whichever is lower. Fixed Assets and buildings are depreciated over the useful life of the asset at rates of between 5 and 100%. Accelerated depreciation methods may be applied to certain asset classes. Tax deductions may be claimed for donations of up to 2% of net profits to approved public charities or for public benefit, 10% of net profits for approved educational causes and 20% of net profits to approved sporting bodies. Entertainment expenses are tax deductible to a limit of the lesser of 0.3% of gross sales income or 10 million baht.

Thai companies are required to file corporate tax returns and make payments of corporate income tax twice annually, and employers are required to withhold personal income tax from their employees. Except for newly incorporated companies, an accounting period is defined as a period of 12 months. Annual tax returns must be accompanied by audited financial statements. Tax losses can be carried forward for up to five consecutive years.

A corporate taxpayer must file a half-year return and pay a tax installment based on 50% of the estimated annual profit by the end of the eighth month of the accounting period. Failure to pay the estimated tax or underpayment by more than 25 percent may subject the taxpayer to a fine amounting to 20 percent of the amount in deficit.

Failure to file a tax return, late filing or filing a return containing false or inadequate information may subject the taxpayer to various penalties. Failure to file a return, and subsequent non-compliance with an order to pay the tax assessed, may result in a penalty equal to twice the amount of tax due. Filing a return with a tax deficiency may result in a penalty equal to the amount of tax. All penalties must be paid within 30 days of being assessed.

Inter-corporate dividends are generally exempt from tax on 50 % of the dividend payment received, provided the shareholding is in place for longer than 3 months prior to, and for at least 3 months after, the payment date. Dividends are exempt from income taxes where there recipient holds 25% of more of the shares of the payer company. The exemptions do not apply where respective cross-holdings exist between the payer and the recipient company.

Personal Income Tax (PIT)

Every person, resident or non-resident, who derives assessable income from employment or business in Thailand, or has assets located in Thailand, is subject to personal income tax Exemptions are granted to certain persons, including United Nations. officers, diplomats and certain visiting experts, under the terms of international and bilateral agreements. Personal income tax is applied on a progressive scale as follows:

Annual Taxable Income (Baht) Marginal Tax Rate
0 – 150,000 Exempt
150,001 – 300,000 5%
300,001 – 500,000 10%
500,001 – 750,000 15%
750,001 – 1,000,000 20%
1,000,001 – 2,000,000 25%
2,000,001 – 4,000,000 30%
4,000,001 – and above 35%

Individuals residing for 180 days or more in Thailand for any calendar year are also subject to income tax on income from foreign sources if that income is brought into Thailand during the same taxable year that they are a resident.

Personal income taxes and tax returns must be filed prior to the end of March of the year following the year in which the income was earned.

A standard deduction of 40 percent, but not in excess of 60,000 Baht, is permitted against income from employment or services rendered or income from copyrights.

Standard deductions ranging from 10 percent to 85 percent are allowed for other categories of income. In general, however, taxpayers may elect to itemize expenses in lieu of taking standard deductions on income from sources specified by law.

Standardized deductions are allowed for other types of taxable income as categorized below:

• Interest, dividends, capital gains on the sale of securities: Forty percent, but not exceeding 60,000 baht.
• Rental income: Ten percent to 30 percent depending on type of property leased.
• Professional fees: Sixty percent for income from medical practice, 30 percent for others.
• Income derived by contractors: Seventy percent.
• Income from other business activities: Sixty-five percent to 85 percent depending on the nature of the business activity.

Taxable Income may be reduced by the following allowances

• General allowance, available to all taxpayer 30,000 Baht
• Allowance for taxpayer’s non-working spouse 30,000 Baht
• Child allowance 15,000 Baht
• Child Eduction allowance 2,000 Baht
• Allowance for Taxpayer’s parents or spouse’s aged parents – 30,000 per qualifying dependent
• Contributions made by taxpayer and spouse to an approved provident fund at the amount contributed but not exceeding 15% of wages or 500,000 Baht per year.
• Interest payments on loans for purchasing, hire purchasing or construction of residential buildings by the taxpayer and spouse at the amount paid but not exceeding 100,000 Baht
• Amounts contributed to the social security fund by the taxpayer and spouse.
• Contributions made by taxpayer and spouse to approved retirement funds at the amount contributed but not exceeding 15% of wages or 500,000 Baht per year.
• Contributions made by taxpayer and spouse to approved long term investment funds at the amount contributed but not exceeding 15% of wages or 500,000 Baht per year.
• Donations contributions at the actual amount donated but not exceeding 10 percent of taxable income after allowances.

Additional taxes can be assessed, within a period of two years from the date of filing a return, and up to five years for tax evasion or tax refund. If an individual fails to file a return, the assessment officer may issue summons within a period of 10 years from the filing due date.

Treaties to avoid double taxation

Thailand has treaty agreements to eliminate double taxation with the following countries:

Armenia, Austria, Australia, Bahrain, Bangladesh, Belgium, Bulgaria, Canada, China, Cyprus, Czech Republic, Denmark, Finland, France, Germany, Hong Kong, Hungary, Indonesia, Israel, Italy, India, Japan, Kuwait, Laos, Luxembourg, Malaysia, Mauritius, Nepal, Netherlands, New Zealand, Norway, Oman, Pakistan, the Philippines, Poland, Romania, Singapore, Slovenia, S Korea, S Africa, Spain, Sri Lanka, Sweden, Switzerland, Seychelles, Turkey, Ukraine, United Arab Emirates, United Kingdom and Northern Ireland, United States, Uzbekistan and Vietnam.

The treaties generally place taxpayers in a more favorable position for Thai income than they would be under the Revenue Code, as profits will only be taxable if the taxpayer has a permanent establishment in Thailand.

Specific Business Tax (SBT)

A specific business tax of approximately three percent is imposed, in lieu of VAT, on the following businesses:

• Commercial banks and similar businesses
• Insurance companies
• Financial securities firms and credit financiers
• Sales on the stock exchange
• Sales of non-movable properties
• Pawn shops.

Remittance Tax

Remittance tax applies only to profits transferred or deemed transferred from a Thailand branch to its head office overseas. It is levied at the rate of 10 percent of the amount to be remitted before tax, and must be paid by the remitting office of the offshore company within seven days of the date of remittance.

However, outward remittances for the purchase of goods, certain business expenses, principal on loans to different entities and returns on capital investment, are not subject to an outward remittance tax. The tax does not apply to dividends or interest payments remitted out of Thailand by a company or partnership; these are taxed at the time of payment.

Section 70 of the Revenue Code addresses income paid to foreign juristic persons. When a company or partnership incorporated under a foreign law and not carrying on business in Thailand receives “assessable income” paid either from or in Thailand, the payer is usually required to deduct income tax at a rate of 15 percent of the gross remittance. In 1992, standard deductions, which used to vary with each type of income, were abolished, making the flat 15 percent rate effective on all assessable income except for dividend income, on which the 20 percent withholding tax was reduced to 10 percent.

There is no withholding tax on capital gains or on the share of profit paid to foreign investors in mutual funds, if in the SET. Physical remittance of funds may not be necessary in order to incur either the dividend or interest tax liabilities. These taxes may be incurred by making book entries.

Other Taxes

Petroleum Income Tax
The Petroleum Income Tax Act replaces the Revenue Code in imposing a tax on income from firms which own an interest in a petroleum concession granted by the Thai government or which purchase oil from a concession holder for export. Net income from petroleum operations includes revenue from production, transport or sale of oil and gas, the value of gas delivered to the government as a royalty and the proceeds of a transfer of interest in a concession. The tax rate for most operators is not less than 50 percent and not more than 60 percent of net profits.

Stamp Tax
The Revenue Code contains a Stamp Duty Schedule listing transactions subject to stamp tax. Rates depend on the nature of the transaction, and fines for failure to stamp documents are very high.

Excise Tax
Excise tax is levied on the sale of a number of goods, including petroleum products, tobacco, liquor, soft drinks, cement, electrical appliances, and automobiles.

Property Tax
Owners of land and/or buildings in designated areas may be subject to annual taxes levied by the local government. Under the Local Development Tax Act of 1965, rates per unit vary according to the appraised value of the land. However, land for the personal residence of the owner, animal husbandry, or land cultivation is exempted from this Act. For land taxable under the House and Land Tax Act of 1932, which is based on the value of the land and buildings or any other improvements, annual tax is levied at the rate of 12.5 percent of the assessed assumed rental value of the property, and only owner-occupied residences are exempt.

Tariff Measures

The Customs Department collects import duties on over 9,000 items. As part of its continuing efforts to improve the tariff structure, the Ministry of Finance is in the process of preparing a comprehensive reform of the country’s tariff structure in line with the country’s development and forthcoming international commitments. Under the ASEAN Free Trade Area (AFTA) agreement, for example, import duties will have to be reduced to 0-5 percent on 85 percent of total product items, representing over 7,000 items, on January 1, 2000.

Furthermore, under the Information Technology Agreement (ITA), 153 items will be exempt from import duties. Given the difficulties faced by producers due to economic conditions and these forthcoming international commitments, the Cabinet approved a variety of tariff measures to lower costs and enhance competitiveness.

In identifying these tariff measures, the Ministry of Finance consulted with the Federation of Thai Industries and the Thai Chamber of Commerce. The measures focus on capital goods, raw materials, and products that are not being produced domestically. The measures include reduced tariffs on capital goods, raw materials, and other products.

Capital goods

Tariff reduction on machinery and mechanical appliances and parts; electrical machinery and equipment and parts; and measuring, checking, precision instruments and apparatus from five and 20 percent to three percent for 326 items.
Raw materials

• Tariff exemption on fish or crustaceans, molluscs or other aquatic invertebrates for breeding, which previously faced a tariff rate of 60 percent.
• Tariff reductions on raw materials for cosmetic, pharmaceutical, food and other industries including lanolin, jojoba oil, vitamin premix, dried glands and organs for medical use from 10 percent to five percent; and on artificial waxes and prepared waxes from 20 percent to 10 percent for 26 items.
• Tariff exemption and reduction on chemical products which are inorganic chemicals, organic chemicals, fertilisers, and miscellaneous chemical products from five and 10 percent to one percent for 148 product items; from 10 percent to five percent for 69 items; and tariff exemption on five products which previously faced a five percent import duty.
• Tariff reduction on 11 plastic items from 20 percent to 10 percent.
• Tariff reduction on lupins, alfalfa, and canola meal from 10 to 40 percent down to five percent for five items.
• Tariff exemption on five cotton items, which help to improve the quality of textile products, and which previously faced a five percent import duty.
• Tariff reduction on copper cathode from six to one percent.
• Tariff reductions on 12 iron items including Tin Mill Black Plate (TMBP) iron and Hi Carbon iron from two, 10, and 12 percent to one percent.
• Tariff exemptions on precious metals including pearl, silver, and platinum for 21 items, which previously faced import duties of one, five, and 10 percent. Tariff reductions on artificial jewelry from 30 and 60 percent to 20 percent for two items.
• Tariff reduction on other raw materials including skins and other parts of birds from 20 and 35 percent to 10 percent; on waste and scrap glass from five to one percent; and on glass rods from 10 percent to five percent for six items.

Other products
The tariff rates of three other products will be restructured in line with the new Harmonized System. The above tariff reductions and exemptions are on a permanent basis, except for the following reductions which are temporary:

• The tariff reductions on inorganic chemicals, organic chemicals, TMBP iron, and Hi Carbon iron to one percent are valid until 31 December 2003, when the tariff rates will be increased to their respective rates in the tariff structure or set at appropriate rates to be considered by the Ministry of Finance.
• The tariff reduction on copper cathode to one percent is valid until 31 December 2000, when the Ministry of Finance will re-consider the appropriate rate.

Removal of the import duty surcharge
The Cabinet has decided to remove the 10 percent import duty surcharge which has been collected since October 15, 1997 on items with a tariff rate over five percent. These measures will directly assist producers in a wide range of industries. For example, the food processing industry will benefit from the tariff reduction on TMBP iron. Producers in the pharmaceutical and cosmetic industries will benefit from lower tariffs on key inputs. The textile industry will benefit from lower cotton and chemical tariffs, while the electronics industry will benefit from lower copper cathode duties.

Furthermore, producers in general will face lowered production costs because of the reduced tariffs on chemicals and machinery. At the same time, the removal of the import duty surcharge will lessen the degree of protection provided to industry and encourage more efficient production.

Consumers will also benefit from these measures in the form of lower prices of goods. The Cabinet has mandated the Ministry of Commerce to monitor the prices of items, which have been affected by the tariff reductions.

Accelerated depreciation of fixed assets
While current tax regulations allow businesses to calculate depreciation expenses according to any generally accepted accounting method, any changes in the method used require the approval of the Director-General of the Revenue Department. In practice, the majority of businesses currently employ the straight line method of depreciation.

To encourage private investment and enhance the productivity of the private sector, under the measure approved by the Cabinet, businesses can now freely choose the double declining balance method of depreciation, by which assets can be depreciated at twice the rate of the straight line method. Furthermore, businesses can fully depreciate the remaining book value of the asset in the last accounting period of the useful life of the asset.

This measure will be applied to fixed assets such as machinery and parts, office equipment, forklifts, aircraft, boat, and other vehicles, but does not apply to passenger cars.

Elimination of export and import registration requirement for gold
On October 15, 1990, the Cabinet approved the deregulation of the export and import of gold and mandated the Ministry of Finance to amend the necessary rules and regulations accordingly. To this end, the Ministry of Finance amended regulations to allow the general public to register for licenses for the export and import of gold. To further liberalize the export and import of gold and support industries such as jewelry and electronics that require gold as an input, the Cabinet has eliminated the registration requirement.

Customs duties
Tariff duties on goods are levied on an ad valorem or a specific rate basis. The majority of goods imported by businesses are subject to rates ranging from five percent to 60 percent.

The majority of imported articles are subject to two different taxes: Tariff duty and VAT.

Tariff duty is computed by multiplying the CIF value of the goods by the duty rate. The duty thus determined is added to the value of the goods determined with reference to the CIF price. VAT is then levied on the total sum of the CIF value, duty, and excise tax, if any.

Goods imported for re-export are generally exempted from import duty and VAT.

Export duties are imposed on only a few items, including rice, hides, skins and leather, scrap iron or steel, rubber, teak and other kinds of wood.

Imposition of taxes

Companies are required to withhold income tax from the salary of all regular employees. A value-added tax of seven percent is levied on the value added at each stage of the production process, and is applicable to most firms. The VAT must be paid on a monthly basis.

A specific business tax is levied on firms engaged in several categories of businesses not subject to VAT, based on gross receipts at a variable rate ranging from 0.1 – 3.0 percent.

Corporate income tax is 30 percent of net profits and is due twice each fiscal year. A midyear profit forecast entails advance payment of corporate taxes.

BOI Tax Incentives Thailand Bangkok

The BOI provides investment matchmaking services to both Thai and foreign investors seeking co-operation in the areas of technology, management and marketing. In addition, the BOI offers a matchmaking service for investors in regional areas looking for joint-venture partners from Bangkok and abroad, as well as for firms that want to invest in provincial areas.

Tax incentives offered by the BOI include:
• Exemption or reduction of import duties on imported machinery
• Exemption or a reduction of import duties on imported materials and components
• Exemption of corporate income taxes for three to eight years, with permission to carry forward losses and deduct them as expenses for up to five years
• Exclusion of dividends derived from promoted enterprises from taxable income during the corporate income tax holiday.
• Additional incentives for enterprises in the Special Investment Promotion Zones include:
• Reduction of corporate income tax by 50 percent for five years after the exemption period
• Double deduction from taxable income of water, electricity, and transport costs for 10 years from the date of first sales
• Deduction, from net profit, of 25 percent of the project’s infrastructure installation or construction cost.
• Additional incentives for export enterprises:
• Exemption of import duties on imported raw materials and components
• Exemption of import duties on re-exported items
• Exemption of export duties
• Allowance to deduct from taxable corporate income an amount equivalent to five percent of an increase in income derived from exports over the previous year, excluding the cost of insurance and transportation.

Criteria for project approval

In determining both the economic and technological suitability of a project for which investment is requested, the Board applies different criteria depending on the level of investment capital. For a project with investment capital, excluding land and working capital, not greater than 200 million baht, the following criteria are used:

• Value added not less than 20 percent of sales revenue, except projects which export more
• than 80 percent of total sales, or use domestic agricultural resources as raw materials, or conserve, restore or develop natural resources and the environment
• Registered capital is at least 20 percent of the total investment
• Modern machinery and production processes are used
• Adequate environmental protection systems are installed.

For a project with investment capital, excluding land and working capital, greater than 200 million baht, the same criteria as for projects with investment capital less than or equal to 200 million baht, plus:

• Impact on its own industry
• Impact on government finances
• Impact on consumers
• Contribution to technological development.

For a project with investment capital, excluding land and working capital, of over 500 million baht, the same as for projects with investment capital greater than 200 million baht, plus:

• A feasibility study.
• Projects which qualify for investment promotion incentives and the conditions under which awards are made are set out on BOI’s “List of Promoted Activities.” The List is broad enough to encompass most industrial projects. The award of tax-related incentives is based on project location and, in certain cases, on type of industry or export orientation.
• The BOI divides Thailand into three investment zones for promotional purposes. These are:
• Zone 1, comprising Bangkok and five contiguous provinces;
• Zone 2, comprising 10 provinces, most of which are within a 180-kilometre radius of Bangkok;
• Zone 3, comprising all other provinces.
• Standard BOI incentives provided to promoted firms include:
• Investment guarantees against nationalization, state monopolies, price controls, tax exempt imports by government agencies, export restrictions
• Visas and work permits for expatriate personnel
• Permission to own land
• Permission to remit money abroad in foreign currency

The principal incentives offered by Zone are:

Zone 1

• No tax exemption or reduction on machinery, except projects which export not less than 80 percent of total sales or locate their factories in industrial estates or promoted industrial zones. Such projects will receive a 50 percent import duty reduction on machinery which is not included in the tariff reduction notification of the Ministry of Finance (Notification No.C 13/2533) and which is subject to import duty greater than or equal to 10 percent
• No corporate income tax exemption, except for projects that export not less than 80 percent of total sales and locate their factories in industrial estates or promoted industrial zones, in which case a three-year exemption will be granted
• Exemption of import duty on raw or essential materials used in export products for a period of one year for projects exporting at least 30 percent of total sales.

Zone 2

• A 50 percent import duty reduction on machinery that is not included in the tariff reduction notification of the Ministry of Finance (Notification No. C 3/2533) and that is subject to import duty greater than or equal to 10 percent
• Corporate income tax exemption for three years, extendible up to seven years for projects that locate their factories in industrial estates or promoted industrial zones
• Exemption of import duty on raw or essential materials used in export products for a period of one year for projects exporting at least 30 percent of total sales.

Zone 3

• Import duty exemption on machinery
• Corporate income tax exemption for eight years
• Exemption of import duty on raw or essential materials used in export products for a period five years for projects exporting at least 30 percent of total sales
• 75 percent import duty reduction on raw and essential materials used in production for domestic sales for five years. This reduction is renewable on an annual basis, provided that raw or essential materials comparable in quality are not being produced or are not originating within the Kingdom in sufficient quantity to be acquired for use in such activity. This does not include projects or factories in Laem Chabang Industrial Estate.

Special privileges are granted as follows:

• Reduction of corporate income tax by 50 percent for five years after the exemption period
• Double deduction from taxable income of water, electricity, and transport costs for 10 years from the date of first sales
• Deduction, from net profit, of 25 percent of the project’s infrastructure installation or construction cost.

Priority activities
The Board has identified projects in the following five areas to be priority activities:

• Basic transportation systems
• Public utilities
• Environmental protection and/or restoration
• Direct involvement in technological development; and
• Basic industries.

Such projects will be eligible to receive the following privileges:

• Corporate income tax exemption for eight years, regardless of location
• A 50 percent import duty reduction on machinery which is not included in the tariff reduction notification of the Ministry of Finance (Notification No. C 13/2533) and which is subject to import duty greater than or equal to 10 percent for projects located in Zones 1 or 2
• Import duty exemption on machinery for projects located in Zone 3.

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