Certification of targeted companies that the government wants to support their business (Capital Gains Tax)

What is Capital Gains Tax Exemption?

Capital Gains Tax Exemption is a tax measure to promote fundraising in Startup by exempting personal income tax and corporate income tax for capital gains or profits from the sale of stocks for both Thai and foreign investors investing in targeted companies operating businesses that the government wants to support. This measure is effective from the day following the date of its publication in the Government Gazette but no later than June 30, 2032. Not only attract high skilled foreign workers to work or invest in Thailand, this measure also support startup to start raising capital and will be benefit for the growth of the domestic economy.

The Startup or companies that would like to submit a request for capital gains tax exemption to the Revenue Department for the investor must have qualifications according to the Royal Decree issued under the Revenue Code on Tax Exemption (No. 750) B.E. 2565, the Notification of the Director-General of the Revenue Department on Income Tax (No. 428), must be a juristic person under Thai law, certified according to the announcement from the National Innovation Agency (Public Organization) as a targeted company of government , applying the technology or creation of innovation as a main part of business operations, and must be in 14 industries as announced by the National Competitiveness Enhancement Policy Committee 1/2561 as following :

1. Next Generation Automotive
2. Smart Electronics
3. Affluent, Medical and Wellness Tourism
4. Agriculture and Biotechnology
5. Food for Future
6. Automation and Robotics
7. Aviation and Logistics
8. Biofuels and Biochemicals
9. Digital
10. Medical Hub
11. Defense
12. Industries support Circular Economy directly and significantly i.e. waste fuel production, water resource management
13. Human Resource Development and R&D for Targeted industries
14. Alternative industries compliance with The 20-year National Strategy regarding the approval of Committee on Policy for National Competitive Enhancement for Targeted Industries

Beneficiaries of Capital Gains Tax Exemption Measures

• Investor : Investors will be exempt from income tax on capital gains from the sale of startup shares.
• Startup : Thai startups get more opportunities to gain investment from Thai and foreign investors.

Process of certification of the targeted companies operating businesses matches the government promoting

1. Targeted companies submit documents as follows with fee payment

(1) Application form

(2) A copy of company/ juristic partnership registration

(3) A copy of "List of shareholders' name" (BOJ.5)

(4) The Certificate of Value Added Tax registration (If available)

(5) Financial Statements From the last 2 years

(6) Documents stating compliance with core technology of business operations (if available)

(7) One Page Executive summary

(8) Pitch Deck

(9) Proof of fee payment.

Submit documents (total file size no more than 25 MB) to [email protected] within the 1st – 10th of every month

2. The NIA examines the submitted documents completeness and considers the certification.

3. The NIA announces the list of certified target companies within 30 days from the date of receiving complete documents.

Download Documents

(1) Application form by NIA

Fee

1. Registration 2,500 baht include VAT
2. Certificate renewal or wish to make changes 1,500 baht include VAT

Fees can be paid by bank transfer to the account :

Krungthai Bank PCL
Account name : The National Innovation Agency (Public Organization)
Account number : 980-1-39088-3

Certified target companies can submit a request to the Revenue Department within 5 years.

Relevant laws and regulations

• Royal Decree issued under the Revenue Code on Exemption from Revenue Taxes (No.750) B.E. 2565
• Notification of the Director-General of the Revenue Department on Income Tax (No. 428): rules, criteria, and conditions regarding the corporate and personal income tax exemptions for Thai and foreign investors in companies operating in targeted industries
• Notification of NIA : Certification of targeted companies for Capital Gain Tax

List of targeted companies operating businesses matches the Capital Gains Tax measurement that is certified by the NIA.