April 5, 2024
On March 15, 2024, Thailand’s Board of Investment (BOI) updated its investment incentives for software development and data centers by issuing a regulation replacing the previous categories of software or platforms for digital services or content (category 8.1) and data centers (category 8.2.1).
The new and updated categories are detailed below.
Software and Platform Development
Under the new promotion policy, the BOI has made separate subcategories for “development” and “improvement” of software or platforms, each with its own set of incentives. The BOI is expected to clarify the characteristics of these two activities in a forthcoming announcement. Qualifying development activities are eligible for a corporate income tax (CIT) exemption for eight years (capped), while improvement activities are not eligible for any CIT exemption.
A number of adjustments have been made to the eligibility criteria for development of software and platforms for digital services or content. These include the following:
Salary expenditures for Thai information technology (IT) personnel hired temporarily after applying for investment promotion can now be included in the calculation of total salary expenditures for Thai IT personnel hired subsequent to applying for investment promotion. Previously, only salary expenditures for permanently employed personnel could be included in this figure. The minimum salary expenditures for each project remain unchanged at THB 1.5 million per year.
Similarly, salary expenditures for temporary hiring of Thai IT personnel can be included in calculating the actual expenditures in the year that the project would like to benefit from the CIT exemption.
Projects must commence operations within 12 months of the promotion certificate being issued. No extensions are allowed.
Projects are no longer allowed to extend the machinery importation period.
The other eligibility criteria for development of software and platforms for digital services or content remain unchanged.
Projects in the new BOI subcategory for improvement of software and platforms for digital services or content