On 25 October 2011, the Thai cabinet approved the following BOI tax incentives in an attempt to restore the confidence of foreigner investors after the flooding crisis.

1. General Measures for Business Operators Affected by the Flood

The following tax exemptions and reductions will apply to new and temporary manufacturing investments for business recovery:

Investments made in Zone 1 outside an industrial estate with no current corporate tax exemption: (a) in the same province affected by the flood will be exempt from corporate income tax for 8 years without a tax exemption ceiling; and (b) in other provinces will be exempt from corporate income tax for 8 years with a tax exemption ceiling.

Investments made in Zone 1 inside an industrial estate with current corporate tax exemption for 3 years: (a) in the same province affected by the flood will be exempt from corporate income tax for 8 years without a tax exemption ceiling; and (b) in other provinces will be exempt from corporate income tax for 8 years with a tax exemption ceiling.

Investments made in Zone 2 outside an industrial estate with current corporate tax exemption for 3 years: (a) in the same province affected by the flood will be exempt from corporate income tax for 8 years without a tax exemption ceiling; and (b) in other provinces will be exempt from corporate income tax for 8 years with a tax exemption ceiling.

Investments made in Zone 2 inside an industrial estate with current corporate tax exemption for 7 years: (a) in the same province affected by the flood will be exempt from corporate income tax for 8 years without a tax exemption ceiling plus a 50% tax reduction for another 3 years; and (b) in other provinces will be exempt from corporate income tax for 8 years with a tax exemption ceiling plus a 50% tax reduction for another 3 years.

Investments made in Zone 3 outside an industrial estate with current corporate tax exemption for 8 years: (a) in the same province affected by the flood will be exempt from corporate income tax for 8 years without a tax exemption ceiling plus a 50% tax reduction for another 5 years; and (b) in other provinces will be exempt from corporate income tax for 8 years with a tax exemption ceiling plus a 50% tax reduction for another 5 years.

Investments made in Zone 3 inside an industrial estate with current corporate tax exemption for 8 years plus a 50% tax reduction for another 5 years: (a) in the same province affected by the flood will be exempt from corporate income tax for 8 years without a tax exemption ceiling plus a 50% tax reduction for another 5 years; and (b) in other provinces will be exempt from corporate income tax for 8 years with a tax exemption ceiling plus a 50% tax reduction for another 5 years.

Investments made in Zone 3 (special) with current corporate tax exemption for 8 years plus a 50% tax reduction for another 5 years: (a) in the same province affected by the flood will be exempt from corporate income tax for 8 years without a tax exemption ceiling plus a 50% tax reduction for another 5 years; and (b) in other provinces will be exempt from corporate income tax for 8 years with a tax exemption ceiling plus a 50% tax reduction for another 5 years.

In addition, there will be an exemption on import duty for machinery in all zones.

Business operators must apply for the investment promotions within 2012.

2. General Measures for Business Operators Unaffected by the Flood

The following tax exemptions and reductions will apply to new and expanded investment:

Investments made in Zone 1 outside an industrial estate with no current corporate tax exemption will be exempt from corporate income tax for 8 years with a tax exemption ceiling.

Investments made in Zone 1 inside an industrial estate with current corporate tax exemption for 3 years will be exempt from corporate income tax for 8 years with a tax exemption ceiling plus a 50% tax reduction for another 3 years.

Investments made in Zone 2 outside an industrial estate with current corporate tax exemption for 3 years will be exempt from corporate income tax for 8 years with a tax exemption ceiling.

Investments made in Zone 2 inside an industrial estate with current corporate tax exemption for 7 years will be exempt from corporate income tax for 8 years with a tax exemption ceiling plus a 50% tax reduction for another 5 years.

Investments made in Zone 3 outside an industrial estate with current corporate tax exemption for 8 years will be exempt from corporate income tax for 8 years with a tax exemption ceiling plus a 50% tax reduction for another 5 years.

Investments made in Zone 3 inside an industrial estate with current corporate tax exemption for 8 years plus a 50% tax reduction for another 5 years will be exempt from corporate income tax for 8 years with a tax exemption ceiling plus a 50% tax reduction for another 5 years.

Investments made in Zone 3 (special) with current corporate tax exemption for 8 years plus a 50% tax reduction for another 5 years will be exempt from corporate income tax for 8 years with a tax exemption ceiling plus a 50% tax reduction for another 5 years.

In addition, there will be an exemption on import duty for machinery in all zones.

Business operators must apply for the investment promotions within 2012.

3. Specific Measures for Automobile Manufacturers Affected by the Flood

* General automobile manufacturers in all zones shall be exempt from corporate income tax for 5 years with a tax exemption ceiling at 100% of investment capital (excluding land value and working capital)

* Eco-car manufacturers (which already have the highest benefits) shall continue to receive the benefits according to the original criteria

* For other industries, the BOI shall consider (and grant specific measures) on a case-by-case basis

4. Specific Measures for Industrial Estates/Zones Affected by the Flood

Industrial estates/zones affected by the flood that improve their facilities for future flood prevention, whether in existing, new or expanded areas, will be exempt from corporate income tax for 8 years with an expanded tax exemption ceiling from 100% to 200% of investment capital (excluding land value and working capital).