Thailand to Implement 15% Tax on Global Firms by 2025

[webfact]

FILE photo courtesy: Sanook

 

In a move poised to reshape its economic landscape, Thailand will impose a minimum corporate tax rate of 15% on large international companies starting in 2025. This announcement, made by Finance Minister Pichai Chunhavajira, marks a significant step for Southeast Asia's second-largest economy as it aligns its tax practices with international standards.

 

The Thai Cabinet recently approved legislation to facilitate this tax implementation, bringing it one step closer to publication in the Royal Gazette, where it will subsequently become law. The government sees this development as a key component of its efforts to secure membership in the Organisation for Economic Co-operation and Development (OECD) within the next few years.

 

Traditionally, Thailand's corporate income tax stands at 20%. However, to attract foreign investment, the nation has offered various tax exemptions and reduced rates for select investment projects. This strategy has been under scrutiny, given international companies often pay taxes in their home countries if exemptions apply when operating in Thailand.

 

“Even if they enjoy exemptions or a mere 5% rate here, these companies will still account for taxes back home,” Mr Pichai explained. “Therefore, we're aligning our practices with international norms, but we also plan to return a portion of this tax to them.”

To sweeten the deal, the Thai government has introduced measures to mitigate the tax burden for foreign enterprises. These incentives include tax relief for companies that engage in specific activities such as relocating research and development departments to Thailand, enhancing their eco-friendly practices, or providing skill-building opportunities for local employees.

 

The Finance Minister elaborated, “By encouraging these practices, we're not just collecting taxes but fostering sustainable growth. We aim to create a more dynamic and competitive market that benefits both the economy and the environment.”

 

In practical terms, this means that global companies could negotiate some financial relief if they contribute to Thailand's aspirations for economic sustainability and local talent development. These measures not only align with Thailand's economic goals but also enhance its attractiveness as a business destination, a factor crucial for maintaining foreign direct investment.

 

As Thailand prepares for this new tax regime, its impact will resonate across the international business community. By aligning with global tax standards, the nation is striving to bolster its credibility and economic viability on the world stage, making it an intriguing space for both current and prospective investors.

 

With the proposed reforms nearing finalisation, stakeholders worldwide will be keenly observing how Thailand balances its ambitions for international integration with the practicalities of domestic economic growth. For Thailand, 2025 marks not just a new tax policy but a step towards greater global economic engagement, reported Bangkok Post.

 

-- 2024-12-13

 

 

[redwood1]

Trust me folks big companies like Google, Ebay, Microsoft, Youtube etc who are in every country on earth, will not be paying jack in taxes.....Their lawyers will make sure of that....They will be on the 0.0% tax plan, along with quite a few uber rich Thais....

 

[tomazbodner]

1 hour ago, redwood1 said:

Trust me folks big companies like Google, Ebay, Microsoft, Youtube etc who are in every country on earth, will not be paying jack in taxes.....Their lawyers will make sure of that....They will be on the 0.0% tax plan, along with quite a few uber rich Thais....

 

Sure they will. Someone has to provide money for populist giveaways... (another one, that is):

 

[John Drake]

Can't wait to see how the Thais squeeze that 15 percent out of the Chinese.