Spa Excise Tax

4 September 2009

Finance Minister Korn Chatikavanij stated yesterday that the Ministry is to consider abolishing or reducing the excise tax of 10 percent for spa establishments.

The tax incentive would apply to spas, and not to massage parlours, as massage parlours may be associated with illegal sex services and not approved by the government. The government had imposed taxes on spa services as some massage parlours reported that they were providing spa services to evade taxes. Therefore, the government was reluctant to promote spa businesses.

With the rise in a more health conscious population, the government may define criteria for spa services eligible for tax incentives, and the spas may need to be certified by the Public Health Ministry according to a newspaper source.

Public Hearings for Draft Retail and Wholesale Business Act

3 September 2009

A series of public hearings on the draft Retail and Wholesale Business Act will be held soon to promote a clearer understanding of the draft law and allow for suggestions and recommendations from all relevant parties for inclusion in the draft. The public hearings will begin this month in Bangkok and upcountry and conclude in two months’ time.

If the new Retail and Wholesale Business Act is approved by Parliament, it may become law as soon as next year.

The public hearings are intended to create fair regulations for both small and giant retailers covered under the law and control the expansion of giant retailers who are putting some small retailers out of business. 

The hearings will focus on business types covered under the draft law, the agency responsible for authorizing the establishment of new businesses, support mechanisms for small retailers, and penalties incurred by violators.

The business categories covered under the draft law are hypermarkets and superstores, discount stores, supermarket and convenient stores or convenient stores at gas stations with combined annual revenue of more than 1 billion baht.

However, department stores, specialty stores, and fresh markets would not be covered under the proposed law.

Stores covered under the draft law include Big C, Carrefour, Makro, Tesco Lotus, Tops Supermarket, 7-11, and Lotus Express.

The draft law prohibits stores under the draft law to operate less than 5 kilometers from municipal areas of communities.

Illegal operators face imprisonment of 1 year and/or 1 million baht in fines for violations under the draft law.

The Commerce Ministry will propose that the government establish a 2 million baht fund to train and finance small retailers so that they can compete with large retailers as reported by a newspaper source.

Government to Clarify Reserved Activities Under the FBA

1 September 2009

Amid talks of foreigners investing in rice farming, an activity reserved for Thais only, the Commerce Ministry, in collaboration with the Board of Investment (BOI), intends to send a message to foreign investors aimed at promoting a clearer understanding of business activities reserved for Thais and prohibited to foreigners under the Foreign Business Act.

Deputy Commerce Minister Alongkorn Ponlaboot said that Thailand was open to foreign investment. Foreigners are allowed to invest in processed food or contract farming, although they are prohibited from purchasing or renting farmland.

Alongkorn reported that some owners of large land farming areas have refused to extend land lease agreements to local Thai farmers as they were desirous of leasing the land to foreigners at a higher price according to a newspaper source.

Related Documents:

English translation of Foreign Business Act B.E. 2542 (1999)

The Foreign Business Act and other Foreign Business Restrictions

FAQ: Proposed Amendments to the Foreign Business Act

Commentary on Foreign Business Act