Incentives readied to draw foreign talent to EEC posts
New personal income tax incentives for high-ranking executives, experts and researchers who work for companies investing in targeted industries and headquartered in the Eastern Economic Corridor (EEC) are set to go before the cabinet next week.
Deputy Prime Minister Somkid Jatusripitak said the government will offer the option of paying a flat tax rate of 17%.
The current structure of personal income tax has seven brackets. Taxable income of 150,001-300,000 baht is charged a rate of 5%, progressing upward to brackets of 300,001-500,000 (10%), 500,001-750,000 baht (15%), 750,001 to 1 million (20%), over 1 million to 2 million (25%), over 2 million to 4 million (30%) and over 4 million (35%).
Mr Somkid said the government deems it essential to offer new tax incentives to entice foreign experts to work in the EEC.
The EEC spans Chon Buri, Rayong and Chachoengsao provinces. The project is intended to accommodate 10 targeted industries to be promoted as clusters by the government. Those industries are nextgeneration cars; smart electronics; affluent, medical and wellness tourism; agriculture and biotechnology; food; robotics for industry; logistics and aviation; biofuels and biochemicals; digital; and medical services.
The corridor is projected to help generate new investment value of up to 1.5 trillion baht within five years from both the government and the private sector.
The law governing EEC development is set to be enforced in the middle of this year.
The Board of Investment (BoI) recently endorsed incentives including tax holidays of up to 13 years to support investment in targeted technologies, greater than the eight-year period for other businesses.
Projects eligible for those tax incentives will be divided into two categories: four targeted core technologies (biotechnology, nanotechnology, advanced materials technology and digital technology) and enabling services.
The BoI also approved waivers for import tariffs on materials to be used in research and development (R&D) for such categories as chemical substances, prototypes, animals and plants.
Investors in general businesses will be also allowed to claim deductions for R&D expenses of 300%, up from 200%, if they invest more in technological or human resource development.
Mr Somkid said the government has also offered its highest corporate income tax exemption period of 15 years and financial support via the Competitiveness Fund to those firms that it has approached for investment in specific projects.