Key takeaways
- BOI privileges belong to the activities and projects that hold a promotion certificate. They do not cover the whole company, and you should not assume that every type of real estate project can apply.
- Using the privileges in practice requires a certificate that matches the business, separate accounts, an allocation basis that can be explained, and monitoring of the privilege ceiling.
- Allocating costs towards the promoted activity may look like a tax saving, but it becomes a risk when the company is audited.
A company receives its promotion certificate and everyone assumes no tax will be payable for several years. At year-end closing, the company finds that some revenue falls outside the certificate, that no one knows how to split central costs, and that the conditions in the certificate have not been checked. BOI privileges are like a coupon with detailed conditions: the coupon has value only when it is used for the right goods, at the right time, with complete supporting evidence.
First question: is your project on the list?
Before putting BOI privileges into the model, check the list of eligible activities and the current conditions against the announcements of the Board of Investment.
| Type of business | What the BOI documents reviewed show | Planning stance |
|---|---|---|
| Developing condominiums or houses for general sale | Not found as an activity type in the handbook reviewed. Low-income housing in the 2020 handbook had to be applied for by the end of 2020. | The base case should not include BOI privileges |
| Hotel | The 2020 handbook includes hotel businesses, with conditions on investment amount or number of rooms, and conditions that vary by province, but this cannot yet be confirmed against the current list. | Check the latest list and conditions with BOI before use |
| Industrial estates and industrial zones | The 2020 handbook has specific items and conditions | A different activity from residential development; the current version must be checked |
The BOI handbook of July 2026 states that policy under Announcement No. 8/2022 applies, but the list of activities is amended continually; for example, Announcement Sor. 5/2025 applies to applications from 1 Jul 2025. Before deciding, ask BOI or the adviser directly responsible. This article does not confirm the privileges of any project.
The main privileges to understand
| Activity group | CIT exemption period | Ceiling |
|---|---|---|
| A1+ | 10–13 years | No ceiling |
| A1 | 8 years | No ceiling |
| A2 | 8 years | Ceiling |
| A3 | 5 years | Ceiling |
| A4 | 3 years | Ceiling |
| B | No CIT exemption under the table | – |
The ceiling for groups A2–A4 generally refers to the project's investment, excluding land and working capital, as determined by the board. The figures above come from the 2026 handbook and were checked against PwC's summary. Use the terms on the company's actual certificate.
Dividends paid out of exempt profits are exempt from tax, subject to conditions, and losses incurred during the exemption period can generally be offset against profits within 5 years after the exemption period ends. BOI may revoke privileges in whole or in part if conditions are not met, and may demand repayment of the tax that would otherwise have been payable.
Example 1: the ceiling runs out before the period ends
Hypothetical example The sample business has a 5-year exemption and a ceiling of THB 80 million. Unit: THB million.
| Year | Profit from promoted activity | Tax calculated at 20% | Exempt portion | Tax payable | Cumulative exemption |
|---|---|---|---|---|---|
| 1 | 60 | 12 | 12 | 0 | 12 |
| 2 | 80 | 16 | 16 | 0 | 28 |
| 3 | 100 | 20 | 20 | 0 | 48 |
| 4 | 120 | 24 | 24 | 0 | 72 |
| 5 | 140 | 28 | 8 | 20 | 80 |
Year 5 is still within the exemption period, but the company must pay THB 20 million in tax because the ceiling has been used up.
Example 2: allocating shared costs
Hypothetical example The promoted activity has revenue of 300 and direct costs of 180. The non-promoted activity has revenue of 100 and direct costs of 70. Central expenses of 30 all meet the normal conditions for deductibility. Unit: THB million.
| Allocation method | Allocated to promoted activity | Allocated to non-promoted activity | Profit from promoted activity | Profit of non-promoted activity | CIT 20% |
|---|---|---|---|---|---|
| By revenue ratio of 75:25 | 22.5 | 7.5 | 97.5 | 22.5 | 4.5 |
| Pushed into the non-promoted activity with no basis | 5.0 | 25.0 | 115.0 | 5.0 | 1.0 |
The CIT difference of THB 3.5 million is not a tax saving. It is a risk of being adjusted, with penalties and surcharges, if the basis does not reflect actual use.
Systems you should have
- Separate accounts Revenue, cost and asset codes separated between the promotion certificate and activities outside it
- Allocation policy State the basis, the rationale, the review frequency and the approver
- Certificate conditions register Due dates, investment, machinery, employment and reports
- Privilege ceiling register Cumulative exempt tax against the ceiling
- Audit-ready file Evidence linking the accounts, the promotion certificate, reports and tax returns
Next steps
- Check the actual business against the BOI list and the latest promotion certificate
- Separate revenue between promoted and non-promoted activities from the accounting system onwards
- Write the policy for allocating shared costs before closing the accounts
- Calculate cumulative exempt tax against the ceiling every quarter
- Assign someone to be responsible for the certificate conditions and due dates
- Have a tax adviser or the auditor review before the return is filed