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Thailand: BoI speeds up rejig of incentives
The Board of Investment (BoI) is accelerating the revision of investment incentives to align them with global changes and offset the impact of the new world tax regimes proposed by the Organisation for Economic Co-operation and Development (OECD).
According to Duangjai Asawachintachit, BoI secretary-general, investment incentives need to be rejigged to retain Thailand’s investment competitiveness after members of the OECD last October took a decisive step towards forcing the world’s biggest companies to pay their fair share of tax.
The plan is for a global minimum corporate tax rate of 15% to be imposed by 2023.
The requirement is for companies that have revenue worldwide of at least €750 million per year.
Governments in countries where parent companies are located can collect a higher corporate tax until the 15% rate is reached if affiliated companies that invest worldwide pay less than 15% in corporate tax, according to the OECD plan.
The OECD estimates the minimum tax will generate US$150 billion in additional global tax revenue annually.
Taxing rights on more than $125 billion of profit will be additionally shifted to the countries were the profit is earned from the low-tax countries where it is currently booked, according to the plan.
Economists expect the deal will encourage multinationals to repatriate capital to the countries where they are headquartered, giving a boost to those economies.
The BoI currently offers the highest privileges available in the country: a corporate income tax exemption for eight years, and a 50% reduction in corporate income tax for five years once the tax holiday lapses if the applying projects invest in R&D or human resources development.
According to Ms Duangjai, the agency reported to the BoI board meeting on April 7 chaired by the prime minister about the necessity to revise promotional privileges to align them with the OECD’s global tax requirements.
She said the BoI is evaluating its current privilege structure and studying global investment trends.
Ms Duangjai said the agency may need to offer additional measures to attract investment and maintain Thailand’s competitiveness.
“We have yet to complete the study on the impact of the OECD’s requirements on the investment climate in Thailand,” she said.
“The OECD’s requirements of course affect all other countries.”
Source: https://www.bangkokpost.com/business/2293334/boi-speeds-up-rejig-of-incentives