Tax & Legal Alert : March 2019 / Thailand

In June 2016, Thailand joined the OECD’s Project to Eliminate Base Erosion and Profit Shifting (BEPS), comprises 15 Action Plans, as a member of the Inclusive Framework (IF). As a part of the IF, Thailand is obligated to comply with the following four minimum standards, which includes “Action 5: Counter harmful tax practices”.

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The Regional Operating Headquarters (ROH), the International Headquarters (IHQ), and the International Trading Center (ITC) regime (henceforth, together referred to as the “pre-existing regimes”) were identified as encouraging harmful tax practices. And, as such, Thailand is required to make changes to its domestic laws in order to comply with Action 5 of the BEPS requirements.

Non-compliance with Action 5 could potentially lead to drastic repercussions for Thailand’s trade and investment perspectives. Thailand’s first attempt in addressing the announcement of the pre-existing regimes as “harmful” was to introduce the new IBC regime (on 28 December 2019) as a replacement for the pre-existing regime and in order to encourage taxpayers to migrate from the pre-existing regimes to the IBC regime.

This newsletter explains the following topics;

  1. Introduction of the IBC laws (Royal Decree No. 674)
  2. 26 March 2019: The Thai Ministry of Finance (TMoF) announces the intention to abolish the pre-existing regimes
  3. Deloitte observations/comments


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>> Click for Japanese [タイ政府がROH、IHQ及びITCの制度の廃止を公表]

(158KB, PDF)

* This Article is based on the relevant Japanese or specific country’s tax law and other authorities in effect on the date of this Article. This Article would not be guaranteed updating if there are any changes in Japanese tax law, any other law, or interpretations by the courts or tax authorities thereof after the date of this Article.

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