Update on cancellation of tax incentives
The Thai Cabinet approved three draft Royal Decrees to cancel all tax incentives provided under the Regional Operating Headquarters (ROH), International Headquarters (IHQ) and International Trading Centre (ITC) regimes on 26 March 2019.
Keywords: Mazars, Thailand, Tax, ROH, IHQ, ITC, Royal Decrees, Government Gazette, Corporate Income Tax,
11 December 2019
On 1 November 2019, those Royal Decrees were published in the Government Gazette. The details of tax incentives which were cancelled under those Royal Decrees are set out below:
Royal Decree No. | Regime | Type of tax | Details |
685 | ROH | Corporate income tax | 10% reduced corporate income tax rate for royalties received from affiliates before 1 June 2019 |
10% reduced corporate income tax rate for service income received from Thai affiliates or interest received from offshore affiliates, provided that such service income or interest is received before 1 June 2019 | |||
10% reduced corporate income tax rate for service income or interest received from offshore affiliates until an accounting period beginning on or after 1 January 2020, but not later than 31 December 2020 | |||
Exemption from corporate income tax for dividends received from affiliates until an accounting period beginning on or after 1 January 2020, but not later than 31 December 2020 | |||
685 | ROH | Corporate income tax | Exemption from corporate income tax for service income received from offshore affiliates before 1 June 2019 |
Exemption from corporate income tax for dividends received from affiliates before 1 June 2019, provided that the ROH has service income or royalties which are subject to reduced corporate income tax rate | |||
Personal income tax | Personal income tax incentives for expatriates regularly working for an ROH, which will end on 31 December 2019 | ||
Withholding tax | Exemption from withholding tax for dividends received by a foreign company not carrying on business in Thailand, where the dividends are derived from the ROH’s service income or royalties which are subject to reduced corporate income tax rate and which are received before 1 June 2019, provided that such dividends are paid by 31 December 2020 | ||
686 | IHQ | Corporate income tax | 10% reduced corporate income tax rate for service income or royalties received from Thai affiliates before 1 June 2019 |
Exemption from corporate income tax for service income, royalties, dividends, capital gains from share transfers, or income from international trading, together with related services received from offshore affiliates before 1 June 2019 | |||
Personal income tax | Personal income tax incentives for expatriates regularly working for an IHQ, which will end on 31 December 2019 | ||
Withholding tax | Exemption from withholding tax for dividends received by a foreign company not carrying on business in Thailand where the dividends are derived from the IHQ’s income which is exempt from corporate income tax and which is received before 1 June 2019, provided that such dividends are paid by 31 December 2020 | ||
Exemption from withholding tax for interest received by a foreign company not carrying on business in Thailand before 1 June 2019 | |||
Specific business tax | Exemption from specific business tax for income from cash management received from affiliates before 1 June 2019 | ||
687 | ITC | Corporate income tax | Exemption from corporate income tax for income from international trading together with related services received from offshore companies before 1 June 2019 |
687 | ITC | Personal income tax | Personal income tax incentives for expatriates regularly working for an ITC, which will end on 31 December 2019 |
Withholding tax | Exemption from withholding tax for dividends received by a foreign company not carrying on business in Thailand where the dividends are derived from the ITC’s income which is exempt from corporate income tax and which is received before 1 June 2019, provided that such dividends are paid by 31 December 2020 |
Want to know more?
