The Thai Cabinet approved an amendment of the tax incentive criteria on 19 June 2018 for the International Headquarters (IHQs) seemingly in response to BEPS Action 5. It limits types of qualified royalty income to only those that are for the result of technological research and development activities performed in Thailand, regardless of whether the research and development activities are performed by the IHQs or other parties engaged by the IHQs. This has yet to become effective as it is subject to further legislative processes.
As there is no specific definition for qualifying royalty income under the existing IHQ program, the proposed change, if in force, will provide a clearer, but more limited definition of royalty income eligible for the incentive.
