TAX NEWS - 2010

Thailand Tax: Incentives for ROH revised

To encourage more Regional Operating Headquarters (ROH) to set up in Thailand, the Minister of Finance has proposed to revise some of the tax incentives available for ROHs. The key changes are as follows:

- A 15-year corporate income tax exemption on net profits derived from offshore income, with net profits from onshore income taxed at a rate of 10%. The criteria that minimum revenue be at least 50% of total revenue will be waived. ROHs currently are subject to a 10% income tax on net profits derived from all income provided the gross amount of offshore income is at least 50% of total income reported by the ROH.

- Reduced personal income tax of 15% for expatriates employed by an ROH for up to eight years (currently four years).

The revised tax measures were approved by the Cabinet and are intended to be effective as from 1 June 2010; however, rules and guidelines still must be issued by the Revenue Department before the law can apply retroactively.

In conjunction with the revised tax measures, the Board of Investment has proposed to waive the condition for setting up an ROH that requires minimum investment of THB 20 to THB 50 million.