Thai Finance Minister Pichai Chunhavajira recently said that the country’s standard corporate income tax rate is 20%, though the government offers exemptions or lower tax rates for some investment projects to lure big foreign companies.
These companies will have to pay taxes to their origin countries anyway even if they get exemption or a 5% tax rate in Thailand, he noted, adding: “We also agree to give back some of the tax collection to them.”
The government has also offered to compensate part of the tax burden for foreign companies if they meet requirements such as moving research to Thailand, improving their operations to be more environmentally friendly, or offering skills training to their local staff, according to the official.
Earlier, the Thai cabinet approved related laws to support the tax implementation, and the laws will be effective after being published in the Royal Gazette.
Southeast Asia’s second-largest economy is trying to update its laws, policies, and tax practices as it seeks admission to the Organisation for Economic Cooperation and Development (OECD) in the next few years.
Under the OECD's rules, multinationals with annual revenues of over 750 million EUR (788 million USD) will be subject to a minimum corporate tax rate of 15%.
Tax collection in Thailand currently accounts for only 14% of the country’s GDP, much lower than the global average of 18%./.
