Tax Breaks for Regional Headquarters Approved
3 June 2010
The Thai Cabinet has approved tax breaks and incentives for foreign and Thai companies that are setting up regional operating headquarters (ROH) in the country.
The new measures were approved on Tuesday and extend an incentive program that has been in existence since 2002.
The new tax package intends to attract foreign investment for ROH through: no corporate taxes for 15 years for income from services to companies outside Thailand; income for services to domestic companies will maintain a 10% corporate tax rate (compared to the standard 30%) for 15 years.
In order to qualify, companies must have a registered capital of at least Bt10 million, spend at least Bt15 million in setting up their offices and management in Thailand and invest Bt30 million baht.
Foreign nationals that are working for ROH will be eligible for personal income tax reductions of 15% for eight years, as opposed to the current four year break. This reduced personal tax rate applies only to staff of ROH that generate at least half of their income from services to companies outside Thailand.
One-hundred companies currently have their ROH located in Thailand and this number is expected to double with these current approved tax breaks and other incentives. |