New Tax Incentives for Regional Operating Headquarters in Thailand

Generous tax incentives are now available for companies eligible to register Regional Operating Headquarters (‘ROH’) in Thailand. When comparing to the previous ROH scheme, the requirements to be a qualified ROH are less strict are will attract more ROH to Thailand.

Keywords: ROH, Tax, Thailand, Revenue Department

Tax privileges provided to Regional Operating Headquarters (‘ROH’) are now legislated for with the following privileges and conditions:

Corporate Income Tax

  1. Corporate income tax exemption for 10 years for that portion of income from qualifying services provided to overseas affiliated entities;
  2. 10% corporate income tax (reduced from 30% normal rate) for 10 years for that portion of income from qualifying services provided to local affiliated entities;
  3. Corporate income tax and WHT exemption for 10 years on dividends received from and paid to foreign entities;*
  4. 10% corporate income tax (reduced from 30% normal rate) for 10 years on the interest income on loans; and*
  5. 10% corporate income tax (reduced from 30% normal rate) for 10 years on royalty income.*

Personal Income Tax

  1. Personal income tax flat rate of 15% (reduced from a progressive rate of 0-37%) for 8 years for qualifying expatriate employees working in Thailand; and*
  2. Personal income tax exemption for expatriate employees working overseas.*

* The tax privileges highlighted in nos. 3-7 will only apply if such entities operating as ROH generate more than 50% of annual income from qualifying service fees and royalties charged to overseas affiliates.

In addition, the ROH may extend the tax privileges nos. 1-5 for another five years (i.e. to a maximum of 15 years), if the accumulated operating expenses from year 1 to year 10 exceed Baht 150 million.

The new concessions are effective from 6 November 2010.

How to Apply

Qualifying entities shall submit an application to the “Large Business Tax Administration Office, LTO” or to the revenue office where the company is located using the form “Establishment of Regional Operating Headquarters Notification Form, Sor Por Por 2 and 2.1” as published in the Revenue Department Website

www.rd.go.th

Notification of the Director-General of the Revenue Department on Income Tax (No. 190-191) dated 15 November 2010.

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