The Ministry of Economy and Finance released Prakas on Income Tax Incentives for Qualified Investment Projects (EQIP) Expansion on May 10, 2024. The following definitions, explanations, and requirements are intended to be included in this Prakas in order to facilitate the acquisition of tax incentives for the EQIP under different conditions:

(1) Restating the requirements for income tax advantages in accordance with Sub-Decree No. 139 on Investment's Article 16 In the following circumstances, an extension of QIP-EQIP might be eligible for income tax incentives:

• expansion of the current production methods,
• expansion through the diversification of production lines within existing lines, and
• expansion through the use of new, cutting-edge technologies that boost output or safeguard the environment.

(2) Definitions of terminology included in Sub-Decree No. 139 restated

The word "QIP's initially registered investment capital" may be self-explanatory and should signify registered investment capital when the QIP was first approved by the CDC. This new definition is substantially narrower. than the undefined term in the Sub-Decree. Consequently, the income tax exemption computation would be significantly impacted by the use of the phrases "effectively invested" and "taking into account the historical value of the assets invested."

(3) Restatement of the formula provided in the Sub-Decree no. 139

IETOI     =             TTI x (EC/TIC)

IETOI     =             Income that shall be exempted from Tax on Income

TTI        =             Total taxable income

EC        =             the QIP’s expansion capital which shall be incentivized

TIC       =             Total Investment Capital (IRC + EC)

IRIC      =             QIP’s initially registered investment capital

(4) Restating the incentive for TOI and minimal tax prepayment

While minimum tax is exempt provided an independent audit report is obtained, the prepayment of TOI for the QIP and EQIP will be exempt depending on the percentage of the QIP's EC rate during the expansion project's income tax exemption period

(5) The elimination of tax benefits If the EC is not effectively invested in the EQIP in accordance with the expansion plan, if the EC is not injected prior to the EQIP's tax exemption status expiring, and if the EQIP does not comply with the current tax rules and regulations, the tax incentives may be removed from the program.