If you are a manufacturer of electric vehicles or related parts, you should be interested in the new incentives discussed below.
Against the backdrop of the Thai government’s policy to promote electric vehicles (EV) across the board and to create an EV manufacturing regional hub, the Thailand Board of Investment (BOI) recently announced a new investment promotion package for EV.
The new package expands the types of parts and also the types of EVs eligible for investment promotion. The BOI previously had a package relating to EV, which expired in 2018 and covered only passenger cars and buses.
The highlights of the new package include:
- Types of EVs covered: passenger cars, buses, trucks, motorcycles, tricycles, and ships.
- Privileges relating to corporate income tax exemption can be summarized as follows:
- Four-wheel vehicles: Battery Electric Vehicles (BEV) project with a total investment worth at least THB 5 billion will receive corporate income tax exemption for a period of 8 years, which may be extendable in case of R&D investment/expenditures.
- For BEV project with total investment worth less than THB 5 billion, a three-year tax holiday will be granted. The tax holiday period for BEVs can be extended if the project meets the set requirements, such as production commencement by 2022, additional parts production, minimum production of 10,000 units within three years, and R&D investment/expenditures.
- Plug-in Hybrid Electric Vehicles (PHEV) project will be granted a three-year tax holiday.
- Motorcycles, three-wheel vehicles, buses and trucks: Projects will be granted three-year corporate income tax exemptions, extendable if meeting additional requirements.
- Electric ship project will be granted 8 years tax holiday.
- For production of critical parts, four categories of EV parts have been added to the list of critical parts, i.e. high voltage harness, reduction gear, battery cooling system and regenerative braking system, that will be eligible to apply for investment promotion.
- To promote local EV battery production, the BOI also approved additional incentives for the production of both battery modules and battery cells by granting a 90% reduction of import duties for two years on raw or essential materials not available locally.
The BOI is expected to issue its official notification soon to implement the above.
The BOI previously approved 26 EV projects under the previous investment package, of which seven have started commercial operations.