Seven benefits in Thailand’s Eastern Economic Corridor
Seven advantages and benefits in Chon Buri, Rayong and Chachoengsao
Benefits under the EEC Act and other legislation covering the Eastern Economic Corridor are not finalized yet. The draft EEC law is pending the deliberation of the Council of State and is expected to be read at the National Legislative Assembly in February 2018.
This post gives just a rough idea about the new legislation. It bases on the date this post has been posted respectively updated. The following seven main tax and non-tax advantages can be expected:
1. Corporate income taxation: The exemption for corporate income taxation (CIT) will be granted up to 15 years instead of the current maximal tax holidays of eight years.
2. Personal income taxation: A fixed personal income tax (PIT) rate of 17% for management, investor, experts, (i) with “world class” skills, (ii) never worked before in Thailand and (iii) work in BOI promoted company in ten “S-curve” industries (Draft EEC Act).
Thailands personal income tax has a progressive rate up to 35%. This results in an unreasonably high tax burden for individuals compared with the 20% corporate income tax (CIT) rate. Under the proposed EEC tax scheme, the personal income tax burden will be cut to a fixed 17% rate. Individuals paying more than 17% can use this EEC flat tax incentive to reduce their tax bill. In some cases, this might result in a 50% tax reduction.
These tax benefits will apply to individual income owners in Chon Buri, Rayong and Chachoengsao provinces only. According to press reports, all local and foreign employees whose companies are investing in one of the ten targeted industries headquartered in the EEC or have received investment incentives from the Board of Investment can enjoy from this scheme.
3. Business visa: A five-year business visa,
4. Leasehold investment: A land lease for 50+49 years,
5. Trade: Trade using foreign currencies directly without having to exchange it into Thai baht,
6. PPP: Under the new PPP EEC TRACK structure, public-private partnerships are streamlined and fast tracked. Details at Seven-speed public-private-partnerships in Thailand.
7. EIA: A fast-tracked environmental impact assessment.
Professional services for investments and business activities in the Eastern Economic Corridor
PUGNATORIUS Ltd. is a Bangkok-based specialist provider of bespoke transactional legal and tax advice in the corporate and property legal and taxation industry sectors. The law firm advises on how to maximize the seven benefits granted in the EEC arena. Send us your investment plan for a swift legal review whether your venture qualifies under the EEC regime, which benefits are granted and which steps are required.