THAILAND – New Tax Incentives for International Business Centers

Published On - 30 janvier, 2019

Albert Hui Actu Orbis, Thailand

On 28th December 2018, the Thai Government enacted a new tax law introducing an International Business Center (IBC) tax regime, replacing the former Regional Operating Headquarters (ROH) and the International Headquarters (IHQ).

An IBC is a company limited incorporated under the laws of Thailand with the following objectives:

–          Provide managerial, technical, support services to affiliates in Thailand and/or in foreign countries,

–          Provide financial management services to affiliates in Thailand and/or in foreign countries,

–          International trading activities

A company willing to benefit from the IBC tax structure must file an application to the Thai Revenue Department and comply with the following conditions:

–          Fully paid-up capital of not less than THB 10 million,

–          Have 10 employees or more with sufficient knowledge and skills for an IBC or have 5 employees or more in case the company only provides financial management services,

–          Have operating expenses of not less than THB 60 million to recipients in Thailand per accounting year,

–          Comply with other rules and regulations as prescribed by the Thai Revenue Department.

For 15 accounting years from the date of approval by the Thai Revenue Department, an IBC is eligible to the following tax incentives:

Corporate Income Tax 8% when annual operating expenses are > THB 60 million and < THB 300 million

5% when annual operating expenses are > THB 300 million and < THB 600 million

3% when annual operating expense are > THB 600 million

Exception: Exempt from Corporate Income Tax on dividends derived from affiliates in Thailand and/or in foreign countries
Withholding Tax on overseas payments Exempt on interest payments to corporate lenders registered in foreign countries
Personal Income Tax Fixed rate of 15% for foreign employees
Profits Remittance Tax Exempt on dividends payments to corporate shareholders in foreign countries (usual rate: 10%)
Specific Business Tax Exempt on financial management services to affiliates in Thailand and/or in foreign countries (usual rate: 3.3%)

If you wish to obtain more information or assistance, please do not hesitate to contact us at contact@orbis-alliance.com.