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Tax cut aimed at foreign firms

10 % rate may attract more regional bases
by Chatrudee Theparat

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 corporate tax.

The 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 regional offices.

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 privileges.

Bangkok Post, December 10, 2001

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