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  • Tag Archive: Thailand

    1. Thailand Approves Global Minimum Corporate Tax

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      Thailand Global Minimum Tax – Introduction

      Thailand has taken steps to align itself with global tax standards by approving a draft law to implement a 15% global minimum corporate tax.

      This measure targets multinational corporations with annual global revenues exceeding €750 million, aiming to ensure fairer taxation and reduce profit-shifting to low-tax jurisdictions.

      The Global Minimum Tax: What It Means

      The global minimum tax is part of a broader effort spearheaded by the OECD to address base erosion and profit shifting (BEPS).

      The aim is to ensure that large multinational enterprises (MNEs) pay a minimum level of tax regardless of where they operate. By implementing this measure, Thailand seeks to:

      • Level the playing field for domestic businesses.
      • Prevent large MNEs from exploiting low-tax jurisdictions.
      • Boost domestic revenue collection to fund infrastructure and social programs.

      Thailand’s Position in the Global Tax Reform

      Thailand’s adoption of the 15% minimum tax reflects its commitment to global economic cooperation.

      The reform aligns the country with over 140 jurisdictions that have pledged to implement the OECD’s tax framework.

      Potential Implications

      While the reform is seen as a progressive step, it raises questions about its impact on Thailand’s investment attractiveness. Key considerations include:

      • Increased Tax Revenue: Thailand anticipates higher tax collections from MNEs.
      • Investment Decisions: Foreign investors may reassess Thailand’s competitiveness compared to jurisdictions with more favorable tax regimes.
      • Administrative Challenges: Implementing and enforcing the minimum tax will require significant resources and expertise.

      Thailand Global Minimum Tax – Conclusion

      Thailand’s approval of the global minimum corporate tax signals its dedication to modernizing its tax system and fostering international cooperation.

      However, the measure’s success will depend on effective implementation and balancing revenue generation with maintaining investment appeal.

      Final Thoughts

      If you have any queries about this article on the global minimum tax, or tax matters in Thailand, then please get in touch.

      Alternatively, if you are a tax adviser in Thailand and would be interested in sharing your knowledge and becoming a tax native, then there is more information on membership here.

    2. Thailand Financial Transactions Tax

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      Thailand Financial Transactions TaxIntroduction

      Draft legislation has been approved by Thailand’s cabinet paving the way for the introduction of a Financial Transactions Tax (“FTT”).

      The tax will apply to securities traded on the Stock Exchange of Thailand (“SET”).

      This does away with a tax exemption that has been in place for over three decades.

      Assuming that it ultimately finds its way onto the statute book, it is envisaged that it will apply to transactions starting from April 2023.

      Existing law

      As alluded to above, the sale of securities through SET has been exempt from specific business tax since the end of 1991. The rationale was that this would stimulate trading on the secondary market and providing a shot in the arm for the domestic economy.

      The FTT essentially acts to repeal this exemption. It is an indirect, transactional tax imposed on income from the gross receipts from share disposals.

      Who will be liable for FTT?

      Broadly speaking it will be those that are selling securities who will be liable for FTT.

      However, the draft law also requires brokers to withhold FTT from the share sales income and to pay these amounts to the Revenue on behalf of the seller.

      Phasing in of the FTT

      It is anticipated that the new FTT tax will be introduced in two phases.

      These phases are as follows:

      Which phase? Rate of FTT (inc local tax) Expected date of commencement
      Phase one 0.055% x gross income from share disposals With effect from April 2023
      Phase two 0.11% x gross income from share disposals With effect from January 2024

      Does the FTT apply to all shares and securities?

      The FTT will apply to the following:

      • shares (both ordinary and preference),
      • warrants,
      • derivative warrants,
      • exchange traded funds,
      • depositary receipts,
      • mutual fund units, and transferable subscription rights.

      Some persons are specifically exempted.

      If you have any queries relating to the new Thailand Financial Transactions Tax or tax matters in Thailand more generally, then please do not hesitate to get in touch.

      The content of this article is provided for educational and information purposes only. It is not intended, and should not be construed, as tax or legal advice. We recommend you seek formal tax and legal advice before taking, or refraining from, any action based on the contents of this article