Legal Issues regarding Tax Measures for Promoting Thai Startups under the Investment Promotion Act B.E. 2520 and the Enhancement of Competitiveness for Targeted Industries Act B.E. 2560: A Comparative Study with Singapore, Japan, and South Korea

Abstract

      The promotion of startups is one of key policies to enhance national economic competitiveness and foster innovation-driven growth. Many countries have implemented tax measures which are specifically designed to support startups. These tax measures include mitigating financial burdens and encouraging investment in high-growth enterprises. However, Thailand’s existing tax framework remains structurally inadequate and lacks clear implementation strategies, resulting in significant barriers to startup growth and competitiveness. This study critically examines legal framework governing tax measures for startup promotion in Thailand, focusing on the Investment Promotion Act B.E. 2520 and the Enhancement of Competitiveness for Targeted Industries Act B.E. 2560. A comparative analysis is conducted with Singapore, Japan, and South Korea. These specific countries have successfully implemented tax policies to support their startup ecosystems.

      The findings reveal that Thailand's current tax measures do not adequately address the unique characteristics of startups. Key legal challenges include the absence of a clear legal definition of “startup,” inconsistencies and overlaps in tax incentives, constraints posed by Sections 31 and 36 of the Investment Promotion Act B.E. 2520, and the lack of a centralized regulatory body dedicated to startup development. In contrast, the examined countries provide well-defined legal classifications, streamlined tax incentives, and targeted regulatory frameworks that facilitate startup growth. Based on these findings, this study proposes clarifying the legal definition of startups, eliminating redundancy in tax measures, revising tax incentives to better support startup scalability, and establishing a dedicated governmental agency responsible for startup promotion. These policy adjustments are essential for enhancing the efficiency of Thailand’s startup ecosystem and strengthening its position in the global market.