The Revenue Department has reduced the corporate income tax rate for businesses in special economic zones (SEZs) to 10% for 10 years to promote investment in the zones.
According to Pinsai Suraswadi, director-general of the department, the tax reduction was approved by the cabinet on Jan 13 and the department issued a royal decree to implement the tax reduction in SEZs.
Mr Pinsai said the Finance Ministry, through the Revenue Department, has promoted investment in SEZs and proposed to the cabinet the draft royal decree to enhance the efficiency of tax measures for SEZ investment promotion.
Under the new measure, the corporate income tax rate is reduced to 10% of net profit, down from the standard rate of 20%.
This applies to companies or juristic partnerships engaging in targeted industries specified by the SEZ Policy Committee and operating within these zones, regardless of the location of their headquarters.
The tax benefit applies to income generated from goods production within SEZs or services provided and utilised within SEZs, for a continuous period of 10 accounting years.
He said this measure should increase goods production, service provision and employment in SEZs.
The tax cut is expected to enhance the connection between production and service activities in SEZs and key economic areas and neighbouring countries, which should increase Thailand's competitiveness, said Mr Pinsai.
There are 10 SEZs located along border areas: Tak, Mukdahan, Sa Kaeo, Songkhla, Trat, Nong Khai, Narathiwat, Chiang Rai, Nakhon Phanom and Kanchanaburi.
Thailand established the 10 SEZs in 2015 to stimulate economic growth, particularly in border areas.
These zones are strategically located to enhance trade and investment opportunities with neighbouring countries, aiming to reduce regional economic disparities and foster local development.