Thailand: Consultation process of the draft Transfer Pricing rules

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The Revenue Department of Thailand is requesting public comments with respect to the Draft Transfer Pricing Rules which were approved by the Thai Cabinet on May 2015. The comments are to be provided by 7 July 2017.

Recently, the draft measures were approved by the National Council of State and are now in consultation process. The draft rules will be enacted after getting approval by the national legislative assembly.

Thailand Joins the Inclusive Framework on BEPS

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Thailand has become the 98th jurisdiction to join the Inclusive Framework (IF) on BEPS and will participate at the next plenary session of the IF with the same rights as the all other IF members, which will take place on 21/22. June 2017 in Noordwijk, the Netherlands

The program will support Thailand in the implementation of new international tax standards with a focus on country reporting and the other BEPS minimum standards as well as standards for the information exchange on request and for the automatic exchange of financial account information (the “common” reporting standard).

Protocol of DTA between Bahrain and Thailand signed

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Bahrain and Thailand has signed an amending protocol of Double Taxation Agreement (DTA) for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income in Manama on 25 April 2017.

Thailand- new tax on e-commerce to be introduced in April 2017

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The Revenue Department of Thailand is planning to enforce a new law to tax cross-border e-commerce transactions by April 2017.

Currently, a foreign operator which carries on e-commerce business but does not enter Thailand or does not have any employee, agent or representative and/or server located in Thailand, were not regarded as carrying on business in Thailand and therefore are not subject to income tax in Thailand.

But now the Thai Revenue Department (TRD) is intended to improve and increase revenue collection from the e-commerce business.


Thailand- Royal Decree on deduction for depreciable assets

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The government of Thailand approved the amendment of Royal Decree No. 604 on 24 January 2017, which was gazetted on 21 April 2016. The amendment permits a 50% additional corporate tax deduction on the expenditure acquired on additions, alterations, extensions and/or improvements of property, plant and equipment which meet the requirements of deduction under section 65 Bis (2) of the Revenue Code. This new rule will be applicable from 1 January 2017 to 31 December 2017.

IMF report comments on fiscal policy of Thailand

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On 28 March 2016 the IMF issued a report following discussions in Thailand under Article IV of the IMF’s articles of agreement.

The economy of Thailand recovered in 2015 following a slowdown and output reached 2.8%. The recovery is expected to slightly strengthen with economic growth of 3% in 2016 and 3.2% in 2017. The IMF report recommends measures to safeguard financial stability.

Despite some external risks Thailand’s strong economic fundamentals provide room to maneuver to improve the economic prospects. The IMF considers that fiscal buffers should be built over time to prepare for the economic challenges of the ageing population. The IMF report therefore recommends that Thailand should gradually raise the VAT rate to 10% as soon as the economic recovery is on a sound footing.

The government of Thailand intends to revise incentives available in Special Economic Zones, to take advantage of Thailand’s location and encourage higher value-added activities. The IMF considers that the cost effectiveness of the incentives could be increased by careful coordination and periodic evaluation of their effect.

Reform of pension schemes would help Thailand to deal with the problems of an ageing population. Productivity could be enhanced by measures in education. Trade integration could also enhance external competitiveness and could facilitate structural reforms.

Thailand-Program for tax audit protection for SME taxpayers

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The government of Thailand recently released an emergency decree providing a “tax audit exemption program” which has become effective and available to taxpayers beginning in 2016.

According to the program, any kind of tax examination, inquiry, assessment, payment demands or criminal prosecution in respect of income generated before 1 January 2016 will be waived. Eligible taxpayers to get facility from the program are those companies and partnerships whose revenue does not exceed THB 500 million (approximately U.S. $14 million) for any accounting period ending on or before 31 December 2015. Thus the program is available for many small- and medium-size enterprises (SMEs). Therefore, income tax, value added tax (VAT), specific business tax (SBT), withholding tax and/or stamp duty due by an eligible company or partnership will get exemption from audit if those taxes are related to income generated or expenses incurred in any accounting period ending on or before 31 December 2015.