New foreign incentives ‘a positive step’
Recently approved incentives for companies to set up international headquarters and international trading centres in Thailand could have a positive effect on foreign investment, say foreign executives.
“After Singapore, I think Thailand could be the next big attraction for [such offices] to open here,” said Stanley Kang, chairman of the Joint Foreign Chambers of Commerce in Thailand.
“It would be good if there were good supporting policies as well, especially moving forward to next year when the Asean Economic Community kicks off.”
The cabinet on Tuesday approved generous tax privileges for companies setting up international headquarters and international trading centres here.
New privileges to be given to headquarters are reduced or eliminated corporate income tax, personal income tax, specific business tax and withholding tax as well as other non-tax measures and facilities.
Under the new incentives, foreign investors setting up headquarters in Thailand will be entitled to a 10% cut in corporate income tax available from services, rights and dividends from local affiliated entities; exemption from withholding tax on dividends received from and paid by the local headquarters to foreign entities; exemption from income tax for sales available through purchasing and selling goods abroad; and a 10% cut in income tax charged on sales available through purchases of raw materials or intermediate products in the country and sold to affiliates or branches abroad for use in production.
Personal income tax on foreign experts and high-ranking executives working for the international headquarters is also cut to 15%, while exemption from specific business tax is provided for lending to affiliated companies both in the country and abroad.
International trading centres, meanwhile, will enjoy exemption from corporate income tax from sales made available through purchasing and selling goods abroad; a 10% cut in income tax on sales from purchasing raw materials or intermediate goods domestically for selling to foreign affiliates or branches for production; and exemption from withholding tax on dividends paid by the trading centre to foreign entities.