Tax cut aimed at
10 % rate may attract more regional bases
Corporate tax is likely to be cut to 10 % from 30 % to encourage
foreign companies to establish their regional offices in Thailand.
Very few foreign companies have regional offices in Thailand. Those
not eligible for Board of Investment (BOl) privileges have opted for
other countries in the region, claiming that tax and non-tax barriers
in Thailand are too high. With the BoIís agreement, the Finance
Ministry will ask the Cabinet tomorrow to approve the proposed cut in
Revenue Department is studying the impact on the government's coffers.
Prime Minister Thaksin Shinawatra will explain the change to American
businessmen when he begins a seven-day visit to the United States on
Thursday. Chakramon Phasukvanich, the BoIís secretary-general, said
the proposed tax reduction was intended to compete with Singapore
where corporate tax is 10 %.
Foreign companies promoted by the BOl will continue to receive the
agencyís privileges, including a five-year tax waiver on setting up
However, the firms are required to meet certain conditions. These
include already having overseas branches and subsidiaries in no fewer
than five countries. They must also provide personnel development
programmes with training centres.
Annual operating expenses for the regional office must not exceed Baht
50,000,000.- and the company is required to invest at least Baht
40,000,000.- in the premises within two years of receiving the
Bangkok Post, December 10, 2001
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