The Ministry of Commerce recently withdrew its endorsement of Thailand joining the CPTPP over concerns that the trade deal may harm farmers.
As businesses adjust to new realities during the COVID-19 pandemic, changes in transfer pricing and other areas will have significant tax planning implications, which we outline here.
This article examines the RCEP trade agreement as it stands in late 2019, while also comparing it to the CPTPP agreement.
With the economic outlook in Thailand less bright than in years past, we look at how the country can find a new way forward for future business success.
As we have seen, Thailand plans to spend money attracting new businesses and tourists, all while lowering personal income taxes. Given such an array of new expenses, the treasury arm of the Thai government would ordinarily come under pressure to balance the budget. Indeed, we have already seen the Ministry of Finance struggling to locate new sources of revenue. Thailand’s Revenue Department has considered plans for imposing taxes on capital gains, casting the tax net wide enough to include on-line operators. Banks will be required to report account holders with high-volume cash transactions in an effort to seal off tax evasion. Plans are in place to increase the tax base – with a target of adding 200,000 new taxpayers per annum.
As the world’s economic engine slows, countries are moving to stimulate their economies by increasing government spending and cutting taxes to inject cash into the domestic economy. Such actions are intended to boost the economy, and prevent it from stalling.
Now that the political climate in Thailand has stabilised, the government is looking to speed up its Free Trade Agreement (FTA) negotiations with key trading partners. Plans include resuming negotiations with the EU and UK post Brexit, as well as talks to join major multilateral FTAs. To be successful in these negotiations, Thailand needs to keep in mind the consequences that non-tariff barriers will have on improving trade as a whole.
Thailand may soon join several countries in taxing digital services and products that are provided by foreign e-commerce operators. In July 2018, the Thai Cabinet approved of a draft law that, if enacted, will see Thailand imposing value added tax (“VAT”) on foreign operators that provide services and content through the internet or electronic media to Thai consumers.
In the final part of this article, we continue our examination of how customs rules for free trade agreements (“FTAs”) should be modernised to meet the needs of a digital economy.
The growth of the digital economy has broken down traditional commercial and geographical boundaries. Goods and services are being delivered and consumed across borders in ways that were unforeseen and at a pace that was unprecedented just decades ago.
Welcome to our Tax hub for tax alerts, white papers and the latest articles into Thailand, regional and global tax legislation.