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Special Tax Incentives for Flood Crisis in Thailand

Thailand

Due to flood crises in Bangkok, the Thai Government has from time to time released new tax incentives to relieve the burden for the flood victims. Taxand Thailand summarises these tax reliefs in detail below.

  • Tax exemption (not exceeding the actual damage), for individuals, juristic companies or partnerships who received compensation in cash or assets from government or from others, due to the flood
  • Tax Exemption for juristic companies or partnerships who received compensation from insurer as a result of flooding for the portion exceeding its insured assets' net book values
  • Allowing donations made from 1 January 2011 onwards by individuals and juristic companies/partnership to flood victims as deduction for tax purpose. However, donations must be made through a registered representative only
  • VAT exemption for goods donated by a VAT operator to flood victims from 1 January 2011 onwards, through a registered representative
  • Extension for tax return filing for taxpayers located in the disaster areas
  • Temporary exemption on import duty for the importation of machinery or its parts (to replace or repair damaged machinery from floods); automobiles (to replace local production due to factory shut down from the flood); and automobile spare parts (to replace the damaged spare parts due to the floods)
  • Thai Board of Investment (BOI) also announced incentives for flood relief for BOI promoted companies as follows:
    • Privilege for reinvestment by flood victims i.e exemption of corporate income tax for 8 years and additional 50% tax reduction for 3 years in certain investment zones; and import duties exemption in all zones on imported machineries
    • Machinery and raw materials can be moved from the factory in case of emergencies; permission can be sought from the BOI later. Duty-free importation of machinery to replace existing machinery damaged by flooding
    • Raw materials imported (duty-free importation) that are still useable can be transferred to another BOI-promoted project
    • BOI-promoted companies affected by flooding are allowed to outsource some part of their manufacturing process on a temporary basis to avoid business interruptions
    • Permission for urgently bringing in experts to work in Thailand for not more than 30 days without non-immigrant B visa

Taxand's Take


Since the flood crisis in Thailand was an unexpected disaster, the above incentives have been released instantly with the aim of relieving tax burden for individuals and also for the business operator. More clarification is still required in practice e.g would other aid (non-cash, non-asset) be tax exempt for individuals. At present, the private sector is working with the government to feed back the problem in practice on the new incentives as well as proposing various incentives for the government's consideration. It is expected that there will be clarification on tax incentives already announced and additional tax incentives to be released in the near future.

Your Taxand contact for further queries is:
Hatasakdi Na Pombejra
T. +66 2 632 1800
E. hatasakdi.np@hnpcounsel.com

Taxand's Take Author