No Phuket takers for BoI-Sipa tax breaks

BANGKOK: More than a month after the government introduced tax incentives to attract foreign investment to the IT sector, not one Phuket-based company has stepped forward to apply for the privileges.

The Software Industry Promotion Agency (Sipa) and the Board of Investment (BoI) signed a Memorandum of Understanding on August 24 to grant new IT firms exemption from corporate income tax for eight years.

Qualified firms would also be allowed duty-free import of IT hardware and software needed for their businesses – provided that the products are unavailable in Thailand.

Chalermcharn Yotviriyapanit, Sipa officer in charge of BoI and Sipa cooperation, said that so far only four Phuket companies had expressed interest in the BoI-Sipa privileges – but none of them had submitted applications.

Sipa President Dr Manoo Ordeedolchest yesterday told the Gazette that his agency had received about 20 applications for corporate-income-tax exemption nationwide. He is now considering 10 of these. He expects to forward six to the BoI-Sipa joint committee for final approval.

These companies each have investment capital of a few million baht, he said, and he estimated the total investment of all the companies that have applied to be around 50 million baht.

To be eligible for the special status, companies must use procedures approved by Sipa and show investment of at least a million baht, excluding land value and working capital.

Clarifying the duty-free import issue, BoI Investment Promotion Officer Choowong Tangkoonsombati said that the exemptions apply only to items that are directly related to IT, that are essential to the work process and that are not available in Thailand .

He gave digital-camera technology needed by computer animation firms as an example of the types of hardware products that would be likely to be granted exemptions.

K. Choowong explained that new firms and IT companies increasing their registered capital are eligible to apply for corporate income tax exemptions, which can not be applied retroactively.