G/SCM/Q2/THA/26  
 
27 January 2016  
(16-0552)  Page: 1/2  
Committee on Subsidies and Countervailing Measures  Original: English  
 
SUBSIDIES 
QUESTIONS POSED BY THE UN ITED STATES REGARDING 
THE NEW AND FULL NOTIFICATION OF THAILAND1 
The following communication, dated 25 January 2016, is being circulated at the request of the 
Delegation of the United States.  
_______________ 
  Program covered in the notification 
Investment Promotion Incentives 
The United States appreciates Thailand's responses to the previous questions of the United States 
regarding Thailand's prior notification the Board of Investments (BOI) incentives pursuant to 
Investment Promotion Act (1977) (Amended 1991, 2001)  (IPA).
2,3 We remain concerned however, 
that the prior notification may not reflect the breadth of programs within the IPA framework, in light of the BOI's discretion in determining what projects or sectors to promote. 
In Thailand's previous answers, a number of BOI-related programs were identified, as described 
below. With regard to each program, could Thailand provide information with sufficient detail to satisfy the notification requirements of Articl e 25.3 of the SCM Agreemen t? Additionally, could 
Thailand explain if the program draws on incentives provided under any other law or legal measure 
besides the IPA, and if so, identify the law or legal measure? 
1. Passenger Car and Large-Sized Motorcycle Program – In 2007, the BOI added passenger car 
and large-sized motorcycle assembly to the list of investment activities eligible for IPA 
incentives. 
2. Zone 3-Equivalent Investment Incentives for Certain Industries – Tax incentives equivalent 
to Zone 3 incentives were introduced by the BOI in 2010 for investments in 
industries related to energy conservation, al ternative energy, eco-friendly products and 
high-technology businesses. 
3. Duty and Tax Incentives for Energy Conservation and Alternative Energy Utilization – 
Incentives, including exemptions on import duty for machinery and corporate income tax, 
were introduced in 2010 for producers who submit investment plans for changes in 
machinery to save energy, use alternative en ergy or reduce environmental effects.  
4. Duty and Tax Incentives for Technology Upgrade in New Product Manufacturing – Incentives, 
including exemptions on import duty for machinery and corporate income tax, were also 
introduced in 2010 for producers who invest in production line upgrades for the manufacture of new products. 
                                               
1 G/SCM/N/284/THA (6 November 2015), Subsidies Notification. 
2 G/SCM/N/220/THA-G/SCM/N/253/THA (11 July 2013), Subsidies Notification, page 5, program II, 
I-EA-T Investment Privileges. 
3 G/SCM/Q2/THA/25 (13 June 2014), Reply to Questions Posed by the United States. G/SCM/Q2/THA/26 
 
- 2 - 
 
  5. Incentives under the Skill, Technology and Innovation (STI) Scheme – Introduced in 2006 
and amended in 2009, this program promotes the development of skill, technology and 
innovation in existing promoted activities by providing additional corporate income tax exemptions. 
Industrial Estate Authority of Thailand (I-EA-T) 
We note that previously Thailand stated that the local content requirements of this program were 
eliminated as of 1 August 2000.
4 However, according to the Secretariat's Report for the latest 
Trade Policy Review of Thailand (TPR/326)5, pursuant to the 2007 I-EA-T Act , "raw materials and 
components are entitled to tax and duty exemptions if they are produced locally".6  
 Could Thailand clarify whether local content continues to be a requirement for the tax 
and duty exemptions under this program an d if so, discuss this requirement in the 
context of Article 3.1(b) of the Subsidies Agreement? 
Programs not covered in the notification  
Information contained in Thailand's Trade Policy Review indicates a number of other programs 
potentially subject to notification obligations. Accordingly, for each of the programs described 
below, the United States respectfully requests that Thailand consider notifying the program or explain why the notification requirements of Article 25 do not apply. Additionally, please respond 
to the specific questions regarding each program where indicated below. 
1. Tax Coupons on Exported Goods – Under the Tax and Duty Compensation of Exported Goods 
Produced in the Kingdom Act B.E. 2524 (1981) , "exported goods manufactured in Thailand 
continue to be eligible for tax coupons, which may be used to pay taxes and duties".7 Could 
Thailand explain how this program is consistent with obligations under Article 3.1(a) of the 
Subsidies Agreement? 
2. Income Tax Deduction for R&D Expenses – Thailand's corporate income tax measures 
include "a number of exceptional allowances … applied in calculating taxable profit, including 
a 200% tax deduction of expenses on R&D, job training …"8  
3. Tax Deductions for Certain Expenditures – Tax incentives "such as exemption/reduction of 
corporate income tax, exemption/reduction of import duties on machinery, reduction of 
import duties on raw materials, and special (e.g., double) deduction of certain expenditures …" that have not yet been "notified to the WTO".
9  
4. Provision of Electricity Below Cost – Thailand's electricity authority, EGAT, supplies electric 
power to certain customers below cost.10 Could Thailand provide information as to what 
classes of customers receive below-cost electricity and whether these include particular industries or producers?  
5. Eco-Car Scheme Tax and Duty Incentives – Launched in September 2013, the "Second 
Phase" of Thailand's Eco-Car scheme provides numerous tax incentives (corporate tax, 
import duty and other tax benefits) for substantive investments and production, with a 
threshold of 100,000 cars per year.11 
__________  
                                               
4 G/SCM/N/220/THA-G/SCM/N/253/THA, page 5, program II, I-EA-T Investment Privileges. 
5 WT/TPR/S/326 (20 October 2015), Trade Policy Review Report by the Secretariat: Thailand 
("TPR/326"). 
6 TPR/326, page 67, paragraph 3.94. 
7 TPR/326, page 67, paragraph 3.93. 
8 TPR/326, page 72, paragraphs 3.110. 
9 TPR/326, page 73, paragraph 3.114. 
10 TPR/326, page 77, paragraph 3.126. 
11 TPR/326, page 77, paragraph 3.127.