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Mazars Thailand Tax Update – June 2011

International Procurement Centre tax measures launched in Thailand.

14/06/2011

Keywords: Thailand, Tax, Revenue Department, IPC, Personal Income Tax, Corporate Income Tax

The Thai Revenue Department has enacted Royal Decree No.518, which aims to provide tax benefits for an International Procurement Center (‘IPC’), which is broadly defined as a Thai company whose business is the purchase of goods, raw materials and parts for resale to an associated enterprise. Eligibility for the tax incentives requires the IPC to meet qualifications such as:

  • a minimum of Baht 10m paid-up registered capital,
  • operating expenses paid to Thai recipients of at least Baht 15m, or
  • capital expenditure paid to Thai recipients of at least Baht 30m, excluding investments in securities; and
  • by the 3rd accounting period, having earned at least Baht 1bn in revenue.

The tax measures include:

Personal Income Tax

Reduced and exempt income tax will be available for up to 3 expatriates who are working for five consecutive accounting periods as high level executives or specialists:

  • Personal income tax rate is reduced to 15% where income is from reselling goods and raw materials or parts purchased for associated enterprises in foreign countries.
  • Exempt income tax for the expatriate who is assigned to work outside Thailand.

Corporate Income Tax

The tax rate will be reduced to 15% of net profit for five consecutive accounting periods where income is from:

  • Goods purchased in foreign countries that are resold to associated enterprises in foreign countries.

Raw materials or parts purchased within or outside Thailand that are resold to associated enterprises in foreign countries for production in foreign countries.

Source: www.rd.go.th

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