Thai Government Introduces New Tax Reduction Schemes for Special Economic Zones in 2025

Your compliance guide to Thailand´s Special Economic Zone tax incentives

Thailand's Royal Decree No. 797/2025 issued under the revenue code on the reduction of tax rates was published in the Royal Gazette on 5th of June 2025. The decree introduces a 50% corporate tax reduction for qualifying businesses in Special Economic Zones (SEZs). This would reduce the standard corporate tax rate from 20% to 10%. This reduced tax rate would be applicable for 10 consecutive annual accounting periods for the eligible companies. This guide provides essential compliance requirements and background information on Thai investments for businesses seeking to capitalize on these tax savings.

Understanding the Regulatory Framework

The reduced tax rate specifically targets companies or juristic partnerships that are conducting Board of Investment (BOI) approved activities within the ten designated SEZs in Thailand. The decree creates a competitive tax environment that advantages SEZ operations over standard corporate taxation schemes. A substantial tax cost savings of 50% can be achieved for businesses operating in SEZs with a reduction in corporate tax rate from 20% to 10%. This incentive only applies to income arising from goods production within SEZs or services provided and utilized within these zones.

Companies must satisfy six critical qualification criteria to access SEZ tax benefits:

1 - Formal SEZ entity registration with the Revenue Department

2 - No concurrent use of other tax exemptions/incentives

3 - Exclusion from prior tax reduction decrees (No. 591/2558, 693/2563)

4 - Permanent SEZ facilities (new registrations) or expansions (existing entities)

5 - Separate accounting for SEZ vs. non-SEZ activities

6 - Full compliance with the Revenue Department operational guidelines

Accounting and Documentation Requirements

Companies must maintain distinct accounting records for SEZ and non-SEZ business activities to comply with the regulations. This separation requirement ensures proper tracking of tax-incentivized versus non-incentivized operations to facilitate accurate tax calculations. Companies must prepare separate financial statements demonstrating clear delineation between qualifying and non-qualifying income streams outlined by the decree.

Strategic Considerations for Investment in Thailand

The SEZs in Thailand offer one of Asia´s most competitive corporate tax environments which is significantly lower than regional peers like Singapore (17%), Malaysia (24%), Vietnam (20%), and the Philippines (25%). This sets Thailand apart as an attractive destination for foreign investors who are seeking to optimize operational costs while accessing the ASEAN markets. 

The current investment trends in Thailand show strong momentum in sectors such as digital technology and electronics. The first quarter of 2025 had over 822 BOI application projects totalling over 431 billion THB. 

BizWings Thailand has over a decade of experience helping foreign companies navigate BOI applications and tax support in Thailand. Our team of experts ensures compliance with all the latest regulatory developments to ensure an integrated end-to-end support from pre-market entry advisory to continuous accounting support and corporate compliance support. With our multilingual team, BizWings can transform complex SEZ and BOI regulations into a long-term competitive advantage with decade-long tax benefits.

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