January 21, 2022 – at the Economic Situation Management Committee
Meeting on the Effects of the Outbreak of Coronavirus, led by H.E. General
Prayut Chan-o-cha, Prime Minister of the Kingdom of Thailand, received an
update on the capital gains tax exemption measure by the Digital Council of
Thailand (DCT) and its partners, led by Mr. Suphachai Chearavanont, Chairman of
DCT. The update is a follow-up on the proposal that was approved by the Prime
Minister since the end of 2021. DCT has reported the success of the collaboration
with the Ministry of Finance and the Revenue Department in issuing a royal
decree on “0% Capital Gains Tax”, as one of the measures to attract foreign
investment, empowering Thai startup entrepreneurs and enhancing the ability to
compete with neighboring countries. This law is expected to be promulgated
around the first quarter of this year.
Mr.
Suphachai Chearavanont, Chairman of DCT reported in the meeting regarding the implementation
progress in which DCT together with the Revenue Department and related
government agencies such as National Science and Technology Development Agency (NSTDA),
National Innovation Agency (NIA) and The Securities and Exchange Commission,
Thailand (SEC) was drafting a decree exempting capital gains tax for investment
in Thai startups. Currently, it is in the process of proposing the draft decree
in accordance with the law by the Revenue Department. In addition, DCT has
proposed to organize a roadshow led by the Prime Minister to maximize the usage
of the new measure by targeting local and international investors and startups throughout
the year. The focus is on target industries such as agriculture, fisheries, and
soft power including movies, sports and e-sport. The plan includes the
establishment of a support center with services such as investors and startups consultation
service, and coordination with the government on related matters including
information and guidelines on how to use the tax benefits. DCT believes that
the capital gains tax exemption measure and the aforementioned activities will
create up to 5,000 new Thai startups by 2022, which is an important part in
Thai economy acceleration, arisen from the collaboration of all sectors.
“It
is a success and an important first step in attracting both Thai and foreign
investors to invest in Thailand, creating added value for the Thai economy.
From now on, DCT will expedite the full coordination in the issuance of this
decree so that the investment promotion policy in technology, innovation and
startups for Thai entrepreneurs will become concrete promptly. In addition, DCT
continues its commitment to the development of a strong ecosystem by focusing
on the development of digital manpower to meet international caliber, aiming to
develop the advanced digital skill group of 3.5 million people by 2027. Standards
and courses with certificates for advanced digital skills will be created to promote
the development of manpower skills. Moreover, this development will be enhanced
by the creation of certified platforms and content development, as well as the
attraction of highly skilled experts from all over the world. This will
stimulate the development and increase the number of advanced digital
workforces in the future.” Suphachai said.
In
this regard, the Economic Situation Management Committee Meeting on the Effects
of the Outbreak of Coronavirus has approved the investment promotion measures
for technology businesses and startups. DCT, Ministry of Finance, and Revenue
Department have been assigned to finish the amendment of the royal decree
issued under the revenue code governing the exemption of income 2016 (No. 597)
and 2017 (No. 636), and to report the progress to the secretary and committee
members within 30 days. Furthermore, DCT has been assigned to lead discussions
with Ministry of Higher Education, Science, Research and Innovation, Ministry
of Labor, Institute of Professional Qualifications, Ministry of Education, Ministry
of Finance, and related agencies to jointly integrate, determine, and develop
the nation's digital manpower development guidelines.
Mr. Sarun
Sutuntivorakoon, President of Thai Venture Capital Association (TVCA) and Partner
of N-Vest Venture Co., Ltd said “Capital Gains Tax Exemption Act is the
fundamental incentive that is greatly necessary in improving the
investment potential for startups and tech companies, as well as increase their
competitiveness abroad. It may not be the factor for an immediate attraction of
foreigners to relocate, however
it is a good starting point for Thai startups to grow and compete with other
countries. It will enable Thai startups to attract potential talents from
around the world to create more value for their businesses.”
Mrs.
Nichapat Ark, Director and Thailand Coverage of Openspace Ventures, as a representative
of Thai and foreign investors, said “This Capital Gains Tax exemption will help
attract more investments into Thailand. The decision to invest in startups
involves many factors which include business planning, potential of the startup, market size, return on
investment, as well as the tax policy of the country. Therefore, this measure
is a good example of how public and private sectors can work together for the
benefit to the country.”
DCT continues to focus on promoting the investment for technology businesses and startups in Thailand. This is considered a great collaboration of all sectors, including the relevant government agencies, the private sector, and relevant groups of Thai and foreign investors. DCT will continue to push the issuance of Capital Gains Tax Exemption Act and maximizing its usage creating positive impacts on various dimensions of the sustainable digital economy of Thailand.