The Thai government upon joining the base erosion and profit shifting (BEPS) inclusive framework, agreed to implement certain minimum standards under Action 5 (harmful tax practices).
Part of the minimum standard under Action 5 relates preferential tax regimes where a peer-review is done to identify features of such regime that can assist BEPS and thus unfairly influence the tax base of other jurisdictions. According to new rule, a country with a preferential tax regime could possibly be listed on the of EU’s tax haven blacklist.
According to a recently published OECD BEPS harmful tax practices progress report on preferential tax regimes several Thai Tax incentives available are found to be preferential tax regimes, which are:
- International headquarters—reported to be in process of being amended
- Regional operating headquarters—reported to be in process of being amended
- Treasury center—reported to be in process of being amended
- International banking facilities—reported to be in the process of being eliminated/amended
- International trade center—reported to be in the process of being eliminated/amended
The Thai authorities have not announced the content or timing of any changes to the tax arrangements that the OECD classifies as preferential tax regimes. Thai taxpayers operating under one of these regimes should continue to do so until changes to the regime come into force.
