WORLD TRADE  
ORGANIZATION  G/SCM/N/186/THA 
12 November 2009 
 (09-5639) 
Committee on Subsidies and 
Countervailing Measures Original:   English 
 
 
 
SUBSIDIES 
 
New and Full Notification Pursuant to Article XVI:1 of the  
GATT 1994 and Article 25 of the Agreement on  
Subsidies and Countervailing Measures  
 
THAILAND 
  
 The following notification, dated 11 November 2009, is being circulated at the request of the 
Delegation of Thailand.    
_______________ 
 
 
 Pursuant to Article XVI:1 of the GATT 1994, and Article 25 of the Agreement on Subsidies 
and Countervailing Measures (ASCM), Thailand would like to submit herewith our new and full 
notification, for the period covered since 1 Janua ry 2007 – 31 December 2008, in accordance with the 
above obligations.    
 The notification process is intended, for the pur poses of transparency, to clarify the operation 
of programmes or measures.  In this regard, furthe r to Article 25.7 of the ASCM, the notification does 
not prejudge the legal status, nature or effect s of notified programmes or measures under the ASCM 
and GATT 1994.     
 
 
  G/SCM/N/186/THA 
Page 2  
 
  TABLE OF CONTENTS 
 
  Page
 
I. INVESTMENT PROMOTION INCENTIVES .....................................................................3  
II. CREDIT REFINANCING PROGRAM .................................................................................4  
A. SMALL AND MEDIUM ENTERPRISES (SME S) REFINANCING .......................................................4  
B. SMALL AND MEDIUM ENTERPRISES AFFECTED BY THE APPRECIATION OF THE BAHT 
REFINANCING ..............................................................................................................................5  
III. INDUSTRIAL ESTATE AUTHORI TY OF THAILAND (IEAT).......................................6  
 
 
  G/SCM/N/186/THA 
 Page 3 
 
 
  I. INVESTMENT PROMOTION INCENTIVES 
1. Title of the subsidy program  
  Investment promotion incentives.    
2. Period covered by the notification
 
  1 January 2007 – 31 December 2008.    3. Policy objective and/or purpose of the subsidy
 
 
 Investment promotion incentives aim at pr omoting the establishment of industries and  
strengthening of technological capability in Th ailand in order to accelerate the country's 
industrialization process and encourage regional deve lopment.  The investment incentives have been 
geared towards decentralization to address the on- going development disparities between the urban 
and rural areas in accordance with the Thai Govern ment's policy theme of regional development.   
 4. Background and authority for the subsidy
 
  The legal basis of these investment prom otion incentives is the Investment Promotion 
Act (1977) amended in 1991 and 2001.  The responsib le authority is the Office of the Board of 
Investment (BOI).    5. Form of the subsidy
 
 
 Tax concessions such as exemption/reduction of  corporate income tax, exemption/reduction 
of import duties on machinery, reduction of import duties on raw materials, and special deduction of 
certain expenditures.   
 6. To whom and how the subsidy is provided
 
  General
 
 
 A wide range of activities covering all sect ors are eligible for investment promotion 
incentives.  The scheme is not specific to any pa rticular sector.  Moreover, companies in every 
province in Thailand can have access to the inv estment promotion incentives.  The Board of 
Investment has established the criteria in granting tax incentives, which are generally based on the 
location of the investments.  The entire count ry is divided into 3 zones as follows:   
  Zone 1 Bangkok and vicinities (Samut Prakan, Samut Sakhon, Pathum Thani, 
Nonthaburi, and Nakhon Pathom);   
  Zone 2  Samut Songkram, Ratchaburi,  Kanchanaburi, Suphanburi, Ang Thong, 
Ayutthaya, Saraburi, Nakhon Nayok, Ch achoengsao, Chonburi, Rayong and 
Phuket;   
  Zone 3  The remaining 58 provinces w ith low income and with less developed 
infrastructure, which are designated as Investment Promotion Zones.   
 
 Zone 1 is granted the least incentives wher eas Zone 3, the most disadvantaged and least 
developed area, is granted the maximum incentives.   Since September 2002, most activities eligible G/SCM/N/186/THA 
Page 4  
 
  for investment promotion may be located in any zone  except certain activities that are required to be 
located in industrial estates or zones for environmental safety reasons.    
 Factory Relocation
 
  In order to further encourage decentralizati on, the Board of Investment also provides 
incentives for the relocation of existing factories to ot her regions.  The following criteria are applied:   
 
1. The operation must relocate from Zone 1 to Zone  2 or from Zone 1 or Zone 2 to Zone 3.   
2. The operation must relocate to an industrial estate or promoted industrial zone.   3. The type of activity must be one that is included in the List of Activities Eligible for 
Promotion and the size of the investment must be in accordance with that specified by the 
Board.   
4. The existing operation must be closed down a nd the operation at the relocated operation must 
start within 2 years after receiving the promotion certificate.   
  The following incentives are granted:    1.  For relocation to Zone 2:  Corporate income tax exemption for 5 years.
1   
2. For relocation to industrial estates or promoted industrial zones in Zone 3, including Laem 
Chabang Industrial Estate and industrial estates or promoted industrial zones in Rayong 
Province:  Corporate income tax exemption  for 8 years1;  50 per cent reduction of corporate 
income tax for 5 years after the exemption period;  and double deduction from taxable income of water, electricity, and transportation costs for 10 years
2;  and deduction from net profit of 
25 per cent of cost of installation or constr uction of infrastructure facilities for 10 years 
starting from the date of first sales.   
 7. Amount of the subsidy
 
  There is no specific budget earmarked for invest ment promotion incentives.  The information 
on the subsidy per unit therefore cannot be provided. No statistics on corporate income tax exemption 
and reduction are available.    8. Duration of the subsidy an d/or any time attached to it
 
 
 The duration of the Investment Promotion Incen tives program is indeterminate.  However, the 
incentives granted to each investment ar e subject to certain time limits.   
 
II. CREDIT REFINANCING PROGRAM 
A. SMALL AND MEDIUM ENTERPRISES (SME S) REFINANCING  
1. Title of the program  
 
 Small and Medium Enterprises (SMEs) Refinancing.   
                                                      
1 Provided that such a project with capital investment of 10 million baht or more (excluding cost of 
land and working capital) obtain ISO 9000 or similar intern ational standard within 2 years from start-up date of 
its new plant, otherwise the corporate income tax exemption will be reduced by 1 year.   
2 Starting from the date of first revenue derived from promoted activity.    G/SCM/N/186/THA 
 Page 5 
 
 
  2. Period covered by the notification  
  1 January 2007 – 31 December 2008.    
3. Policy Objective and/or purpose of the program
 
  To assist small entrepreneurs access to financial resource.    4. Background and authority
 
 
 The legal basis of this scheme is the Royal Decree Regulation the Affairs of the Bank of Thailand B.E. 2485, Section 12(4) and 12 (7).   The responsible authority is the Bank of 
Thailand (BOT).    5. Form of the program
 
 
 Short-term refinance.    6. To whom and how the fund is provided
 
 
 In January 2007, the BOT revised the re gulation on refinancing program by providing 
financial assistance to Micro and Small Enterprises instead of Small and Medium Enterprises.  The program is extended to Micro and Small Enterprises in  general, and is not co nfined to any product, 
sector or market.  This financial assistance is provide d in the form of short-term loan at preferential 
interest rate through commercial banks and speciali zed banks.  The participated financial institutions 
are required to contribute 50 per cent of total loan amount.   
 7. Amount of the assistance
 
  By the end of 2007 and 2008, the outstanding balance on SMEs financing program were 
18,795.7 and 4,500.2 million baht, respectively.   
 
8. Duration of the assistance and/or any time limit attached to it
 
  Each entrepreneur will obtain financial assistance for a maximum of 3 years.  On 3 June 2008, the BOT announced a change in its role in providing financial assistance, through 
financial institutions, to priority economic sectors.  The change was made so as  to be in line with the 
duties which ought to be of the central bank accordin g to the BOT Act B.E. 2485 and amended by the 
BOT Act (No.4) B.E. 2551, which came into e ffect on 4 March 2008.  The BOT would no longer 
provide soft loans to new borrowers, but would co ntinue lending to existing borrowers up until the 
termination date of each lending program.    
9. Statistical data permitting an assessment of the trade effects of the program
 
  Not applicable.    B. S
MALL AND MEDIUM ENTERPRISES AFFECTED BY THE APPRECIATION OF THE BAHT 
REFINANCING  
1. Title of the program  
  Small and Medium Enterprises (SMEs) affected by  the Appreciation of the Baht Refinancing.   
 G/SCM/N/186/THA 
Page 6  
 
  2. Period covered by the notification
 
  1 January 2007 – 31 December 2008.    3. Policy Objective and/or purpose of the program
 
 
 To provide financial assistance to small and medium entrepreneurs affected by the 
appreciation of the Baht.    4. Background and authority
  
 
 The legal basis of this scheme is the Royal Decree Regulation the Affairs of the Bank of Thailand B.E. 2485, Section 12(4) and 12(7).  The responsible authority is the Bank of Thailand (BOT).    
5. Form of the program
 
  Short-term refinance.    6. To whom and how the fund is provided
 
 
 In August 2007, the BOT provided new financial assistance to entreprene urs affected by the 
appreciation of the Baht.  The program is extended to Small and Medium Enterprises in general, and 
is not confined to any product, sector or market.  This financial assistance is provided in the form of short-term loan at preferential interest rate th rough commercial banks.  Th e participated financial 
institutions are required to contribute 50 per cent of total loan amount.   
 
7. Amount of the assistance
 
  By the end of 2007 and 2008, the outstandi ng balance on this program were 142.9 and 
247.6 million baht, respectively.    
8. Duration of the assistance and/or any time limit attached to it
 
  Each entrepreneur will obtain financial assistance for a maximum of 3 years.     On 3 June 2008, the BOT announced a change in  its role in providing financial assistance, 
through financial institutions, to pr iority economic sectors.  The change was made so as to be in line 
with the duties which ought to be of the central bank according to the BOT Act B.E. 2485 and amended by the BOT Act (No.4) B.E. 2551, whic h came into effect on 4 March 2008.  The BOT 
would no longer provide soft loans to new bo rrowers, but would continue lending to existing 
borrowers up until the termination date of each lending program.    
9. Statistical data permitting an assessment of the trade effects of the program
 
  Not applicable.    
III. INDUSTRIAL ESTATE AUTHORI TY OF THAILAND (IEAT) 
1 Title of the subsidy programme
 
 
 I-EA-T Investment Privileges.   
  G/SCM/N/186/THA 
 Page 7 
 
 
  2. Period covered by the notification  
  1 January 2007 – 31 December 2008.    3. Policy objective and / or purpose of the subsidy
 
 
 I-EA-T Investment Privileges aim at promoti ng the establishment of industrial plants and 
industrial related activities in privilege area in  industrial estates in Thailand to accelerate 
industrialization process of the country and create mo re value products.  Meanwhile, the growth of 
industries is made in a harmony with environmen tal management and quality of life in order to 
guarantee balanced development of ec onomy, environment and society.   
 4. Authority for the subsidy
 
  The legal basis of the I-EA-T Investment Privile ges is specified in Industrial Estate Authority 
of Thailand Act B.E. 1979 amended in 1991, 1996 and 2007.  The authorized organization is IEAT.   
  The current IEAT Act (No.4) B.E. 2007 was approved by the Parliament in 2007.   5. Form of the subsidy
 
 
 I-EA-T Investment Privileges cover the exempti ons of payment of surcharge under the law on 
promotion of investment, import duty, value added tax on machinery, equipment, tools and supplies 
including the component thereof which are essential for the production of goods, as the case may be, 
and on materials to be used for the construction, assembly or installation of factory or building and 
goods imported and taken into privilege area by i ndustrial operator and trader for use in the 
production of goods.   
 6. To whom and how the subsidy in provided
 
  Privileges are provided to the industrial operato rs who are permitted to  engage in industrial 
operation in privilege area in industrial estates.   
 
7. Amount of the subsidy
 
  No specific budget provided.    
8. Duration of the subsidy and / or any time limit attached to it
 
  Upon operation period.    9. Statistical data permitting an assessmen t of the trade effects of the subsidy
 
 
 Not applicable.   
   
__________