Tax Incentives Approved to Attract New Regional Operating Headquarters

21 October 2010

On October 19th, 2010, the Thailand Cabinet approved tax incentives for multinational companies to create International Procurement Centers (ICPs) throughout Thailand.

Following the government’s strategy to promote Thailand as a key player in ASEAN, this decision will foster interest for international companies to create regional operating headquarters in Thailand.

Companies that are deemed eligible for the tax incentives will be able to receive a corporate income tax rate of 15%, compared to the usual rate of 30% for five accounting periods. The incentives will only apply to the income from selling Thai products to the company’s production facilities abroad, or the company’s trade transactions with overseas businesses.

The eligible IPCs must comply with the Thai Revenue Department’s rules, including paying operating expenses of at least 15 million baht per year to Thai nationals, registering capital of at least 10 million baht and locating and hiring no less than three specialists to work at the IPC, paying at least 2.5 million baht in salary per person per year. Another provision states that no more than three foreign production employees will be eligible for a 15% flat rate of personal income tax for five years.

It is thought that at least 100 companies or more will soon submit applications for the new tax incentives to create new International Procurement Centers.

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The Investment Regime in ASEAN Countries

New BOI Regulations and Tax Incentives for Property Developers

UPDATE:  Thai Court Dismisses Local Charges Against Viktor Bout

5 October 2010

In Bangkok today the Criminal Court reversed its original decision from the day prior, and dismissed charges of wire fraud and money laundering that were brought against Russian arms dealer Viktor Bout in February, opening the door for the extradition process to proceed.

According to the Bangkok Post, the charges were dropped due to lack of sufficient evidence and other technicalities.

On Monday, the court rejected the local Thai prosecutor’s request to have local charges against Bout dropped.

With the additional charges of money laundering and fraud now dropped, the long lasting saga of Bout’s case in Thailand may be allowed to finally steer towards a resolution ending in Bout’s extradition to the United States to face charges of terrorism.

Related Articles:

Thai Ruling Stalls Viktor Bout Extradition

Russian Viktor Bout: Thailand Justice Assisted by US Government

A Short FAQ on the Viktor Bout Extradition Fiasco

Extradition Request Rejected by Thai Judge

Fugitives in Thailand

Related Documents:

US Thai Extradition Treaty

Thai Ruling Stalls Viktor Bout Extradition

5 October 2010

After arriving to a Bangkok court yesterday in a bullet proof vest, alleged arms smuggler Viktor Bout received an important court decision that could delay any progress on his possible extradition to the United States on charges of terrorism. The court rejected the local Thai prosecutor’s request to have local charges against Bout dropped.

However, according to The Nation, the Criminal Court will rule today on whether or not Bout should be extradited to the United States on charges of money laundering and fraud.

Although a U.S. appeals court originally ruled for Bout to be extradited to the United States on August 20th, this decision was postponed by complications with the Thai legal system. The U.S. brought additional charges, including money laundering and fraud, against Bout in February. These additional charges, combined with pressure from the United States and Russia to adhere to each country’s version of events, led to a diplomatic tug-of-war and a legal bottleneck in the Thai courts.

On Monday, Thai prosecutors went before the Bangkok Criminal Court to ask that these additional charges be dropped, in order for the case to be cleared for extradition proceedings. From there it was up to the court to rule whether or not to dismiss the additional charges. As the Appeals Court stated on August 20th that the extradition must take place within three months, or by November 20th, this created a loophole for Bout, as under Thai law a defendant may object to charges against himself/ herself being dropped. Bout’s objection on Monday to the dismissal of the additional charges can lead to an extension of the process beyond the November 20th deadline, beyond which date the extradition order will expire. If this order expires, this will cause the two-and-a-half year process to be required to start all over again.

Bout, a former Russian air force officer, has been jailed in Thailand since March 2008, when he was arrested in Bangkok during a U.S. and Thai-led sting operation with US agents posed as arms buyers from the Revolutionary Armed Forces of Colombia (FARC).

Related Articles:

Russian Viktor Bout: Thailand Justice Assisted by US Government

A Short FAQ on the Viktor Bout Extradition Fiasco

Extradition Request Rejected by Thai Judge

Fugitives in Thailand