Insights

Transparency and Exchange of Information for Tax Purposes

Early this year, Thailand has signed and deposited its instrument of ratification of the MLI which now covers over 1800 bilateral tax treaties. This is a strong commitment to prevent the abuse of tax treaties and base erosion and profit shifting (BEPS) by MNEs. The convention will enter into force from 1 July 2022.

The Country-by-Country reporting notification must generally be filed as soon as possible and no later than 12 months after the last day of the accounting year.

With Thai businesses and citizens tightening their belts amid the COVID-19 economics crisis, we examine whether the Thai government's current tax reduction will provide sufficient help.

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.

In this article, we explain how taxpayers could leverage on Advance Pricing Agreements (“APAs”) to guard against the uncertainties of tax compliance in an era of increasingly complex tax rules.

In an ever-increasing integrated global economy, businesses have been establishing their footprints in various locations across the continents. These so-called “multi-national corporations” or “MNCs” have sophisticated supply chains and business platforms comprising of dozens, if not, hundreds of entities, all of which are directly or indirectly related to one another. Under this corporate umbrella, the affiliates would trade and transact with one another.

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.

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