BOI  Promotes  Investment  in  Robotics  and  Automation  Industry

     In recent times, robotics is one of the most talked-about topics in various industries. Robotics and automation technology is proved to be valuable for a wide range of industries, since it will reduce and replace human labor, especially in unsafe workplace and it also can tackle more precision applications. Human resources skills in modern-day industries should be shifted to more analysis-based work. Robotics and automation systems are a perfect human labor replacement and therefore, should be used extensively in manufacturing industry.
     The Thailand Board of Investment or BOI promotes investment in robotic and automation industry for both Supply Side (manufacturers of robotics and automation systems, robotics and automation parts, as well as software developers for robotics and automation) and Demand Side (manufacturers who apply robotics in production processes)

     (1) Investment Incentives for the Supply Side are, for instance, 5-8-year corporate income tax exemption. The incentives apply to 15 business activities, as follows:

Robotics and Automation Systems
Activities Incentives e.g.
1. Manufacture of automation machinery and/or automation equipment with engineering design, including automation system integration and control system configuration 8-year corporate income tax exemption
(without tax exemption cap)
2. Manufacture of automation machinery and/or automation equipment with engineering design, including control system configuration 8-year corporate income tax exemption
3. Assembly of robots or automation equipment and /or automation parts 5-year corporate income tax exemption
4. Engineering design 8-year corporate income tax exemption
(without tax exemption cap)
Supporting Activities
Activities Incentives e.g.
5. Manufacture of emission, transmission and reception devices used in fiber-optic and wireless communication system 8-year corporate income tax exemption
6.Manufacture of telecommunication products 5-year corporate income tax exemption
7. Manufacture of parts for emission, transmission and reception devices used in fiber-optic and wireless communication system 8-year corporate income tax exemption
8. Manufacture of other telecommunication products 5-year corporate income tax exemption
9. Manufacture of electronic control and measurement instruments for industrial/agricultural 8-year corporate income tax exemption
10. Manufacture of parts for electronic control and measurement instruments for industrial/agricultural use, medical/scientific devices and automotive industries 8-year corporate income tax exemption
11. Manufacture of security control equipment 8-year corporate income tax exemption
12. Manufacture of parts for security control equipment 8-year corporate income tax exemption
13. Microelectronics design 8-year corporate income tax exemption
(without tax exemption cap)
14.Embedded system design 8-year corporate income tax exemption
(without tax exemption cap)
15.High value-added software 8-year corporate income tax exemption
(without tax exemption cap)
     (2) Investment Incentives under the Measures to Improve Production Efficiency for the Demand Side are, for instance, 3-year corporate income tax exemption with tax exemption cap does not exceed 50 percent of the investment capital (without cost of land and working capital). The applying projects must utilize automation system in existing production lines to improve production efficiency, e.g., mechanical arms for picking cast iron or steel parts, in order to avoid high-risk and dangerous tasks.

     Incentives under these measures are granted to both existing BOI promoted projects (only promoted projects with expired tax exemption or reduction period, and promoted projects without tax exemption) and non-BOI promoted projects. The activities in these projects must be eligible for investment promotion.

     Measures to Promote Improvement of Production Efficiency for projects utilizing automation systems are divided in to four groups, as follows;
     1. Utilization of automation systems for energy conservation, alternative energy utilization or reduction of environmental impact with following examples;
          - Energy Conservation, e.g., replacement of furnace equipment in glass production lines, modification to high efficiency cooling fans, replacement of ovens in production lines of processed food products, etc.
          - Alternative Energy, e.g., installation of solar panels to produce electricity for own-usage, generation of electricity from waste water, etc.
          - Reduction of Environmental Impact, e.g. improvement of waste water management system, installation of Vent Master to reduce the circulation of Volatile Organic Compounds (VOCs), etc.
     2. Machinery replacement or upgrade to improve production efficiency, e.g., installation of automated conveyor systems in warehouses, installation of furnace cleaning robots, installation of automatic raw material feeding system, installation of x-rays machines in production lines, etc.
     3. Research and engineering design to improve production efficiency, e.g., development of products to achieve better quality or simplified usage, development of modern prototypes, engineering design for production process to improve production efficiency or reduce waste from the production line, etc.
     4. Agroindustry’s upgrade towards international standards, e.g., investment in improvement of agroindustry and agricultural processing businesses towards international standards, which have not been widely achieved in Thailand. This measure should encourage projects to upgrade their process to meet international standards, as well as requirements to export agricultural products to foreign countries. International standards are, for instance;
          - Good Agriculture Practices: GAP
          - Forest Stewardship Council: FSC
          - ISO 14061 SUSTAINABLE FOREST MANAGEMENT SYSTEM (SFM), etc.

     For the second group or manufacturers who apply automation systems in the production processes, application for investment promotion must be submitted within December 2020.

     Furthermore, on February 14, 2018 the Board of Investment has improved the Measure to Improve Production Efficiency and broaden the scope of this Measure to cover the usage of digital technology, such as an installation of equipment for measurement and storage of data in a digital form, utilization of Internet of Things in management and control etc. 3-year corporate income tax exemption with tax exemption cap does not exceed 50 percent of the investment capital will be granted to existing project.

     Stay tuned for additional updates on the Measure to Improve Production Efficiency.