PUGNATORIUS S.A. | Overseas Advisors


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PUGNATORIUS S.A. | Overseas Advisors

  1. 1. International tax planning and the implications of the new corporate income tax rate in ThailandImplications of thenew CIT rate• Status quo: The new CIT rate regime for 2012, 2013, 2014• Dependencies between the CIT rate and tax planning policies: What is international tax planing?• Practical considerations for the tax structuring• Implications on sales, services, and financing• Offshore companies - are they still a useful tool?
  2. 2. Promised in July ...• “Ms. Yingluck said an aggressive, nationwide increase in the minimum wage, by 40% to 300 baht, about $10, per day in Bangkok, is set to take effect at the beginning of 2012. ...• ... But employers will benefit from a cut in corporate tax rates that she plans - to 23% from 30%. That rate will fall further, to 20% in 2013.”• Wall Street Journal, July 7, 2011 ... and delivered in December• On December 21, 2011, the Thai Government announced in Royal Decree No. 530 B.E. 2554 the following CIT reduc- tions: ✓ 23 % of net profits of the juristic person for the first accounting period which begins on or after 1 January 2012; ✓ 20 % of the net profits of the juristic person for the following two accounting periods which begins on or after 1 January 2013 and 2014.• The Revenue Code has not been modified.• PIT has not been changed.
  3. 3. CIT rate comparison USA France Germany Australia Japan Thailand 2011China / Vietnam Thailand 2012 Thailand 2013 Singapore Hong Kong 0 10 20 30 40Source: OECD Tax Database 2011 Corporate Income Tax RateCIT rate of SME commencing 2012• Royal Decree No. 530 reduces in Section 6 the CIT rate for small and medium sized enterprises (SME), that means ✓paid up capital not exceeding THB 5 million and ✓gross annual revenue from sale of goods or services not exceeding THB 30 million• The CIT rates for SME: ✓Net taxable profit THB 1 to 150,000 is tax exempt in the accounting year 2012 and thereafter. ✓Net taxable profit THB 150,001 to 1 Million, CIT rate is 15% in the accounting year 2012 and thereafter. ✓Net taxable profit THB 1 million is taxed at a CIT rate of 23% in the accounting year 2012. ✓ Net taxable profit THB 1 million is taxed at a CIT rate of 20% in the accounting year 2013 and thereafter.• Maximal tax savings 2013: (850,000 x 5%) + (150,000 x 20%) = THB 72,500, approximately equivalent to a MacBook Pro
  4. 4. Please see the complete and latest version of this document athttp://www.scribd.com/collections/4054603
  5. 5. PPUGNATORIUS Ltd. Company Profile29th Floor, Central World Tower PUGNATORIUS is an independent law office based in Bangkok,999/9 Rama I Road, Pathumwan Thailand. We provide international corporations, investorsBangkok 10330, Thailand and law firms with premium legal and tax services relatingTel: 0066 22072647 to Thailand, Southeast Asia and offshore jurisdictions. WeFax: 0066 22072657 are specialized to guide foreign clients through the red-tapeE-mail: lawyers@pugnatorius.com requirements, legal hurdles and international tax structuringWebsite: www.pugnatorius.com of their foreign investments, trade operations, real estate developments or other business in Thailand and Southeast Asia. EABC Representative Products & Services Dr. Ulrich Eder Expert advice in foreign direct investments in Thai manufacturing Rechtsanwalt, Steuerberater, and service sectors and real estate developments. Gateway Managing Director to investments in Myanmar and utilization of Thailand as lawyers@pugnatorius.com investment hub for the ASEAN region. Implementation of cross- border tax planning strategies for overall tax mitigation and risk management. International tax advice and individually tailored tax planning solutions for corporate and private clients with the inclusion of offshore jurisdictions. Corporate asset protection and advanced financing solutions. Senior Management 1. Dr. Ulrich Eder, German lawyer and tax counsel, Managing Director European ASEAN Business Centre (EABC) 69