On 10 July 2017, Royal Decree (No 641) was gazetted, providing an income tax incentive for executive, specialist and research foreigners to come to reside in Thailand on a SMART Visa and work in Thailand's Eastern Economic Corridor.

This Tax Insight summarizes the income tax incentive under RD (No 641).

Eastern Economic Corridor

The Eastern Economic Corridor is the following 3 provinces of Thailand, that the Government is promoting as the EEC for enhancing Thailand's development and competitiveness:

• Chachoengsao, Chonburi, and Rayong.​

Targeted Industry Business

A Targeted Industry Business is a business that operates one of more of the ten business types that uses technology for its production processes or providing its services according to the National Science and Technology Development Office.​

The Tax Incentive under Royal Decree (No 641)

The Royal Decree (No 641) prescribes the income tax incentive for foreigners to come and reside and work in Thailand's EEC under a SMART Visa, as follows:

Applicability

From and including 11 July 2017.

Entitlement Right

For executive, specialist or research foreigners coming to reside in Thailand and working for a Targeted Industry Business in the EEC under a SMART Visa:

• A right to pay a flat rate 17% personal income tax on their employment incomes instead of the 0-35% progressive rates of tax.

Rules, Procedures and Conditions

1. The foreign employees of the Targeted Industry Business in the EEC:

1. Shall be executives, specialists or researchers who have the qualifications prescribed by the Board of Investment for a SMART Visa,
2. Shall have a hire-of-labor employment contract with a Targeted Industry Business in the EEC,
3. Shall perform their hire-of-labor employment duties at the place of the Targeted Industry Business in the EEC,
4. For the tax year prior to claiming the tax concession shall not have been in Thailand or if in Thailand, not more than 180 days,
5. For the tax years this tax concession is claimed, shall be in Thailand for 180 days or more in each year except for the first and last of those tax years for which less than 180 days in Thailand is permitted, and
6. Shall comply with the Revenue Department's additional rules, procedures and conditions.

2. The corporate entity of the Targeted Industry Business in the EEC:

1. Shall notify the employees claiming this tax concession by completing and filing the prescribed form with the Revenue Dept before the first payment being made to the employees,
2. Shall pay to the employees claiming this tax concession, income that is hire-of-labor income under Section 40 (1) of the Revenue Code,
3. Shall pay the total full amount of the hire-of-labor income to the employees claiming this tax concession in Thailand, and
4. Shall comply with the Revenue Department's additional rules, procedures and conditions.

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