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1. Investment Promotion Board Announcement No. 15/2022

1.1 Promotion of measures to upgrade the industry (Smart and Sustainable Industry) in the case of measures to improve efficiency in machinery modification and automation.

To clarify the investment promotion measures under the efficiency improvement measures for machinery and automation systems for projects related to industrial upgrading, the following details are provided:

• Eligibility of Applicants for Promotion
  

  – Businesses applying for promotion must comply with the Board of Investment Announcement No. 15/2565, dated December 8, 2022. An investment of not less than 1 million baht, excluding land and working capital, is required. The investment must be made within 3 years from the date the promotion certificate is issued.

  – In the case of machinery modification using an automated system (the business applying for promotion must be eligible for promotion on the date of application according to this measure and must not fall under the categories of businesses that are not granted rights and benefits according to the BOI Office Announcement No. 4/2565).

  – In the case of machinery modification that does not involve an automated system (the business applying for promotion must be eligible for promotion on the date of application according to this measure and must be a business that is eligible for corporate income tax exemption benefits).

• Scope of Promotion
  The promotion covers the replacement of machinery and automation systems to increase production or service efficiency. However, it does not include the replacement of spare parts or consumables.
• Benefits
  – Exemption from import duties for machinery.
  – Exemption from corporate income tax for 3 years, at a rate of 50% of the investment, and exemption from corporate income tax on income from the existing business.

1.2. Promotion of measures to upgrade the industry (Smart and Sustainable Industry) in the case of measures to improve efficiency in the use of digital technology

To clarify the investment promotion measures under the efficiency improvement measures through the use of digital technology for projects related to industrial upgrading, the following details are provided:

• Eligibility of Applicants for Promotion
  – Businesses applying for promotion must comply with the Board of Investment Announcement No. 15/2565, dated December 8, B.E. 2565. The business must be eligible for investment promotion at the time of applying for promotion under this measure.
  – The applicant for benefits must complete the process within 3 years from the date the promotion certificate is issued and provide evidence of the purchase or rental of digital technology to enhance operations.An investment of not less than 1 million baht is required.
• Scope of Promotion
  – The promotion covers the adoption of digital technology to enhance operational efficiency or the overall performance of the organization.
• Benefits Granted
  – Exemption from corporate income tax for 3 years, at a rate of 50% of the investment, and exemption from corporate income tax on income from the existing business.
  – The method for calculating the value of digital technology will consider the source of the digital technology, including related services and proof of payment.

1.3 Promotion of measures to upgrade the industry (Smart and Sustainable Industry) in the case of measures to improve efficiency in upgrading to Industry 4.0

To clarify the investment promotion measures under the efficiency improvement measures for upgrading to Industry 4.0, the following details are provided:

• Eligibility of Applicants for Promotion
  – Businesses applying for promotion must comply with the Board of Investment Announcement No. 15/2565, dated December 8 B.E. 2565. The business must be eligible for investment promotion at the time of applying for promotion under this measure.
  – The applicant for benefits must complete the process within 3 years from the date the promotion certificate is issued.An investment of not less than 1 million baht is required.
• Scope of Promotion
  The promotion covers the upgrading of machinery and automation systems, as well as the adoption of digital technology to enhance operational efficiency or the overall performance of the organization. This does not include the replacement of parts/materials due to deterioration.
• Benefits
  

  – Exemption from import duties for machinery.
  – Exemption from corporate income tax for 3 years, at a rate of 100% of the investment, and exemption from corporate income tax on income from existing operations.The method for calculating the value of digital technology will consider the source of the digital technology, including related services and proof of payment incurred.

1.4 Promotion of industrial upgrading measures (Smart and Sustainable Industry) in the case of industrial upgrading measures regarding the use of automation and robots in production or service for new investment projects applying for investment promotion for businesses in Group B

To support new investment projects in utilizing automation and robotics in production or services for Group B businesses:

• Eligibility for Promotion
  – Projects applying for rights and benefits must be Group B businesses as announced by the Board of Investment at the time of application.
  – Businesses in Group B refer to those that will receive specific benefits related to machinery, raw materials, and non-tax-related benefits.An investment of not less than 1 million baht is required.
  No time frame is specified for the investment.
• Scope of Promotion
  – The implementation of machinery or robots in production or services must involve the installation of automated machinery or robots, integrating automation systems to assist in all or some stages of the process.
• Benefits
  – In the case of using automation systems to support production or services, there will be an exemption from corporate income tax for 3 years, at a rate of 50% of the investment.
  – In the case of using machinery connected to or supporting the manufacturing industry, with a minimum of 30% of the machinery value, there will be an exemption from corporate income tax for 3 years, at a rate of 100% of the investment.

1.5 Promotion of measures to upgrade the industry (Smart and Sustainable Industry) in the case of measures to upgrade the industry towards Industry 4.0 for new investment projects that apply for investment promotion for businesses in Group B according to the announcement of the Promotion Board. Investment No. 15/2022

To clarify the investment promotion measures for efficiency improvement towards Industry 4.0:

• Eligibility for Promotion
  – Projects applying for rights and benefits must be Group B businesses as announced by the Board of Investment at the time of application.
  – An investment of not less than 1 million baht is required.
  – No time frame is specified for the investment.
• Scope of Promotion
  – Investment must include machinery, equipment, and digital technology in the areas of automation and interconnectivity, data analytics, and intelligent operations to elevate towards Industry 4.0.
• Benefits
  – Exemption from corporate income tax for a period of 3 years, at a rate of 100% of the investment.

2. Taxation for Cryptocurrency

Digital currencies or Cryptocurrencies are a type of digital assets secured by encryption. They are designed to be use as an exchange, similar to the currency except it is intangible. When there is an income from cryptocurrency, the following cases must be subject to taxation

2.1.The sale, transfer or exchange of cryptocurrencies / digital tokens to another person, specifically when the price is higher than the investment, it considered as assessed income according to section 40 (Kor) (Shor). The calculation of such costs for the same type of asset must use an accounting standard method, such as FIFO. Additionally, it needs to be calculated separately according to the type of coin. The taxpayer can use any method to calculate, but once chosen the method, it must be used throughout the tax year.

2.2.Crypto mining is not considered the assessed income on the received day but once sale, transfer or exchange such crypto, it will be assessed income according to section 40(8) which can be deducted with appropriate expense. The miner must keep relevant document and prepare the cost accounting such as electricity, commission and investment-relate cost such as computer which deducted by the depreciation.

The calculation of such costs for the same type of asset must use an accounting standard method, such as FIFO. Additionally, it needs to be calculated separately according to the type of coin. The taxpayer can use any method to calculate, but once chosen the method, it must be used throughout the tax year.

2.3.Received cryptocurrencies as a salary or wage: If received by the employee, it considered as assessed income derived from employment as per section 40(1). However, if it received by the employer, it shall be subject to section 40(2). If both salary and wages are received from the same employer, the taxpayer must report it as income under Section 40(1). For valuation, use either the value at the time of receipt or the average price on the date of receipt, whichever is a reliable price. This method must be used throughout the tax year. After pay the tax, it can be used as the cost basis for calculating tax when the cryptocurrency is sold.

2.4.Received as a gift or reward: It is considered assessed income as per section 40(8). For valuation, use either the value at the time of receipt or the average price on the date of receipt, whichever is a reliable price. This method must be used throughout the tax year. After pay the tax, it can be used as the cost basis for calculating tax when the cryptocurrency is sold.

2.5.Receiving benefits from holding

2.5.1 Digital tokens: These are considered assessed income as per Section 40(4)(Sor). For valuation, use either the value at the time of receipt or the average price on the date of receipt, whichever is a reliable price. This method must be used throughout the tax year. After pay the tax, it can be used as the cost basis for calculating tax when the cryptocurrency is sold.

2.5.2 Cryptocurrencies: These are considered assessed income as per Section 40 (8) For valuation, use either the value at the time of receipt or the average price on the date of receipt, whichever is a reliable price. This method must be used throughout the tax year. After pay the tax, it can be used as the cost basis for calculating tax when the cryptocurrency is sold.

3.Taxation of remote workers (DTA Benefits)

The issue in the case of remote workers who do not have an LTR Visa (Long Term Resident Visa): Do they have the right to tax exemption under the Double Taxation Agreement (DTA)?

Thailand Double Taxation agreement
Almost all Double Taxation Agreements (DTA) that Thailand has entered into with other countries stipulate tax exemption criteria for income earners under the “Independent Personal Services” clause, separately from dependent personal services. Only a few DTAs stipulate tax exemption criteria under a single clause for “Personal Services,” such as the agreements between Thailand and Japan, the Netherlands, Bulgaria, Belgium, Malaysia, and the Philippines. According to these criteria, personal income tax in Thailand will be exempted if the following conditions are met:

1. There must be no permanent establishment in the source state.
2. There must be no permanent establishment in the source state, and the stay in the source state must not exceed the specified time.
3. There must be no permanent establishment in the source state, and the stay in the source state must not exceed the specified time. Additionally, the income or remuneration received must not be borne by an enterprise or a permanent establishment in the source state.
4. There must be no permanent establishment in the source state, and the stay in the source state must not exceed the specified time. Additionally, the remuneration received must not exceed the specified amount.
5. The stay in the source state must not exceed the specified time, and the remuneration must be paid by an enterprise in the residence state, not by an enterprise or a permanent establishment in the source state.
6. The stay in the source state must not exceed the specified time, and the remuneration received must not exceed the specified amount.
7. There must be no services that earn income in the source state.
8. The stay in the source state must not exceed the specified time, and there must be no permanent establishment in the source state exceeding the specified time. Additionally, the remuneration must not be deducted from profits subject to tax in the source state.

Summary, remote workers, whether Thai or foreign nationals earning income from abroad, are eligible for tax exemption in the source country with which Thailand has a double taxation agreement (DTA), provided they meet the conditions specified in the DTA. However, if they do not meet the specified conditions and must pay taxes in the source country, these remote workers can use the taxes paid in the source country as a tax credit in Thailand according to the criteria in the DTA.