Does Thailand BOI exempt all taxes, and which ones still apply?

01The two things BOI actually exempts

"Once you have BOI you stop paying tax" is the most widely repeated, and the most expensive, misreading among Chinese-invested companies in Thailand. Promoted status is genuinely valuable, but what it exempts is a small and clearly defined set of taxes, not the whole tax chain. This page sets the boundary: what is exempt, what is paid anyway, and what happens to the routine filings.

There are two blocks. The first is corporate income tax exemption under section 31 of the Investment Promotion Act: 3 to 13 years depending on the tier, and most tiers carry a cap — the cumulative exemption cannot exceed 100% of the project investment, excluding land and working capital, as determined by the Board. The clock starts on the first day the promoted activity earns revenue, not on the date the certificate is issued.

The second is import duty exemption: section 28 removes import duty on machinery, and section 36 removes import duty on raw materials used to produce for export. How import duty is worked out and how much can be exempted.

02Import VAT on machinery is cash flow, not a permanent cost

The 7% VAT on imported machinery is, in practice, usually waived alongside the section 28 duty exemption. Even where it is paid, a VAT-registered company can normally take it as input credit or claim it back, so it ties up cash rather than becoming a permanent cost. How to get accumulated input VAT back.

Strictly, though, this is "usually waived together with the duty", not "BOI exempts VAT automatically". Plan for it as a cash-flow item rather than deleting the line from the budget.

03What is still payable: excise, and the local tax on top of it

If your import list includes batteries, energy-storage products or electric vehicles — goods that are subject to excise — the BOI duty exemption does not help: excise is payable. There is also a local tax levied at 10% of the excise amount, which travels with the excise and is equally outside the BOI exemption. Both are collected by the Excise Department, a different agency from Customs and from the Revenue Department. Each collects its own.

This is not a paper argument. On projects our advisers have handled, import duty and import VAT on machinery were exempted to zero under BOI while battery excise and the local tax on top of it were paid in full. The usual failure point is a landed-cost sheet with a single "BOI exempt" column and no separate line for excise. The goods arrive, the assessment lands, and someone has to find the cash to clear customs.

One piece of relief: goods that are exported or sold into a free zone can be registered for a zero excise rate, and what actually gets assessed is the portion used domestically. Rates are set item by item by the Excise Department for the specific good, so one product's rate cannot be read across to another.

04Routine filings carry on, and an exemption only counts if you use it

Promoted status does not change how the company files month to month.

• VAT and withholding tax are filed as usual. BOI status does not alter the routine obligations: the monthly VAT and withholding tax returns, the PND and PP series, all still have to go in. BOI's own quarterly and annual reports are a separate track — do not treat one as covering the other.
• The income tax exemption has to be claimed each year. The relief happens when you file the annual PND.50: you complete the BOI exemption schedule and draw down against the cap on the certificate. Leave it out and the exemption goes unused.
• When the cap is used up or the term ends, tax resumes. Once the cumulative exemption reaches the cap you pay normally, even if years remain on the certificate.

The right way to do the sums is two columns side by side: what is exempt, and what is paid anyway. Duty exempt; corporate income tax exempt according to tier; excise and the local tax listed separately and paid; routine filings running as before. Which tier your project sits in, whether your import list contains excise-taxable goods, and how much of the cap is left have to be checked line by line by our advisers against your approval documents, import list and accounts. Do not let "BOI is tax-free" stand in for the whole calculation. What the BOI filing engagement covers.