In Thailand, certain activities are exempted from Value Added Tax (VAT). These include:

1. Small businesses whose annual turnover is less than 1.8 million Baht;
2. Sales and import of newspapers, magazines and textbooks;
3. Sales and import of unprocessed agricultural products and related goods such as fertilizers, animal feeds, pesticides, etc;
4. Certain basic services such as:

– Transportation services such as domestic and international transportation by way of land;

– Renting immovable properties;

– Educational services provided by the government and private schools and other recognized educational institutions;

– Professional services such as medical and auditing services, lawyer services in court, and other similar professional services that have laws regulation such professions;

– Healthcare services provided by the government and private hospitals and clinics;

5. Services in the nature of employment of labor, research and technical services and services of public entertainers;
6. Goods exempted from import duties under the Industrial Estate law imported into an Export Processing Zone (EPZ) and under Chapter 4 of the Customs Tariff Act;
7. Imported goods that are kept under the supervision of the Customs Department which will be re-exported and be entitled to a refund for import duties;
8. Cultural services such as amateur sports, services of libraries, museums, zoos; and
9. Other services such as religious and charitable services and services of government agencies and local authorities.

Know more about Thai taxation and understand its complexity. Contact MSNA, English speaking accountants and tax experts in Bangkok.

In line with the ASEAN Economic Community (AEC) which will take effect in 2015, the Thai government aims to become center for Regional Operating Headquarter (ROH) for multinational companies who would like to setup their ROH to expand their operation within the ASEAN region or to prepare itself for the upcoming AEC. Being strategically located within the Southeast Asia region with networks of modern infrastructures, quality skilled labor, easy access to raw materials and attractive tax incentives significantly represent as a cost-effective investment for any companies who want to save costs and at the same time, still remain competitive. Government policies also contribute to Thailand’s apparent strengths in its position as a strategically located business hub and center for production and regional outsourcing.

The Thailand Board of Investment (BOI) act as a focal point for the investors in dealing with different government agencies by bringing together under one roof the representatives from different relevant ministries. The Thailand BOI offers assistance on applications for business licenses, factory certification, environmental impact assessments and many other matters. Besides Regional Operating Headquarter, the Board of Investment of Thailand is also promoting the following related activities with tax and non-tax incentives vary depending on the activities.

• International Procurement Offices, involving sourcing, quality control and packaging
• Trade and Investment Support Offices
• International Distribution Centers
• Distribution Centers
• Research and Development

For investors who are interested in establishing the Regional Operating Headquarter in Thailand, please visit the BOI’s website www.boi.go.th for more details on incentives and conditions in setting up a ROH. Need further assistance in setting up Regional Operating Headquarters and other business forms in Thailand, contact English speaking ThaiLawyers for business registration, license application, visa and work permit services.

The ASEAN Disclosure Standards Scheme is one of the capital market initiatives undertaken by the ASEAN Capital Markets Forum (ACMF) under its regional capital market integration plan (Implementation Plan) endorsed by the ASEAN Finance Ministers in April 2009 in Pattaya, Thailand. The Implementation Plan was developed to promote the development of an integrated market to achieve the goals of the ASEAN Economic Community (AEC) Blueprint 2015 to form an integrated ASEAN market by 2015.

This Scheme aims to facilitate cross-border offerings of securities within the ASEAN region by harmonizing disclosure requirements and support fund-raising activity. It will also benefit ASEAN and non-ASEAN issuers who make multi-jurisdiction offerings of equity and plain debt securities within ASEAN by increasing efficiency and reducing costs. Under this Scheme, when an issuer wishes to make a multi-jurisdiction offer of securities, the issuer needs to provide only a single set of disclosure documents that comply with the ASEAN Disclosure Standards to investors in each jurisdiction.

The Scheme also bring ease and cost savings to all issuers who make multi-jurisdiction offerings of plain equity and debt securities that require the registration of prospectuses or registration statements within ASEAN. Under the framework, issuers will be required to comply with a set of common disclosure standards, known as the ASEAN Disclosure Standards which are based on standards on cross-border offerings set by the International Organization of Securities Commissions (IOSCO).

Further details of the ASEAN Disclosure Standards Scheme and Implementation Plan are available on the ACMF website at www.theacmf.org. Interested to invest in Thailand, contact MSNA for your business needs.

The exporter who wants to become a Registered Exporter and receive certain privileges should submit the Registered Exporter Application Form (SorTor.1) along with the required documents to the following offices:

1. For a company under supervision of Bureau of Large Business Tax Administration can submit the application at Planning and Evaluation Division of the Bureau of Large Business Tax Administration.
2. Other companies can submit the application at Area Revenue Branch Office

2.1 For a VAT registered company located in the jurisdiction of Area Revenue Office within Bangkok area, the application must be submitted at Withholding Tax and Refunds Sub-division.

2.2 For a VAT registered company located in the jurisdiction of Area Revenue Office outside Bangkok area, the application must be submitted at Tax Processing and Refunds Sub-division.

Once the application documents are submitted, the following approval process will take place:

• The Bureau of Large Business Tax Administration or Area Revenue Office (depending on the case), will verify the credibility of the exporter who submitted the Registered Exporter Application Form.
• Then, the opinion will be sent to the Registered Exporter Classification Committee to review and send to the Director of Bureau of Large Business Tax Administration or the Director of Area Revenue Office for approval.
• The Bureau of Large Business Tax Administration or Area Revenue Office (depending on the case) will then notify the result to the exporter.

Interested in setting up an exporting company and become a Registered Exporter in Thailand? ThaiLawyers can help you for company registration, visa and work permit application. MSNA’s Thai Tax Advisors can help you coordinate with the Thai Revenue Department for Registered Exporter application.

As a way to support exporters in Thailand, the Thai Revenue Department (TRD) makes every effort to help increase the international competitiveness for local businesses. Hence, the TRD categorize exporters into ordinary exporters, good exporters and registered exporters.

Today, we summarize the criteria set by the TRD for Registered Exporters in Thailand. This is in accordance with the Departmental Instruction No. Tor.597/2545 dated 19 December B.E. 2545.

Qualifications of a Registered Exporter

For exporters who would like to be considered as Registered Exporters, they must have the following qualifications:

1. The exporter must be a juristic company or partnership or an individual who is a VAT registered.
2. The exporter must have carried on business of not less than 12 months and have ratio of goods exported abroad not less than 50% of total sales in the last 12 months prior to submitting the Registered Exporter Application form and have proof of bringing foreign currency into Thailand or a proof that shows the transaction has been set-off.
3. The exporter must have stability and continuity in operations and have ownership rights in immovable property e.g. land, building, factory and etc.
4. The exporter must have net assets exceed net debt for the last accounting period prior to submitting the Registered Exporter Application Form for a limited company or partnership.
5. The exporter must have good tax history, have paid taxes according to the real business situation, and have never avoided paying taxes.
6. The exporter must be a member of commercial association(s) or private organization(s) e.g. Thai Chamber of Commerce, Provincial Chamber of Commerce etc. and such association(s) or organization(s) can verify the credibility and reliability of the company’s financial status.

Conditions

Exporter who will be approved as Registered Exporter must meet the following conditions:

1. The exporter has VAT refund directly deposited into the bank account.
2. If possessing branch office(s), the exporter must be authorized to file tax return and pay VAT in consolidation.
3. In case an exporter is a juristic company or partnership, the Certified Public Accountant or Tax Auditor who will verify and certify financial statement for the accounting period in which the company submits the Registered Exporter Application Form, must be appointed by consent of the shareholders meeting and must follow the conditions in Section 3 septem of the Thai Revenue Code. The exporter must submit CPA’s name and registration number, CPA office’s name, an accountant’s name and accounting office’s name.

The above information outlines the general conditions and qualifications for a Registered Exporter applicant and is subject to any changes without prior notice. Interested to become a Registered Exporter in Thailand, contact MSNA for Registered Exporter application.

Today, we got an interesting question from one of our inquiring clients:

Question: We want to set up a trading company in Thailand. We will import products from overseas but we are not sure if we will be allowed. What are the products that we cannot bring to Thailand and which government agencies should we contact to get the proper permission?

Answer:

The Thai Customs Department is charged to stop the importation and exportation of prohibited goods in Thailand. It is also designated to intercept the importation and exportation of restricted goods, ensuring that all relevant laws and regulations are followed properly. Moreover, the comprehensive list of prohibited and restricted goods as well as information about the control and in the case of restricted goods to the permission to import/export may be obtained from the Department of Foreign Trade, Ministry of Commerce.

The following information from the Thai Customs generally outlines the prohibited or restricted goods in Thailand. This will give you the idea where you can obtain more information about the control and, in the case of restricted goods, to apply for permission to import/export.

Prohibited Goods

Prohibited goods are goods for which either the import into or export out of Thailand are prohibited. Any person imports or exports prohibited goods is considered as committing offences and subject to penalties indicated in the relevant national legislation. In addition, such activity is also considered as an offence under Articles 27 and 27 bis of the Customs Act B.E. 2469. It is prohibited by law to bring the following items into our out of Thailand.

• Narcotics e.g., marijuana, hemp, opium, cocaine, morphine, heroin
• Goods with Thai national flag
• Fake Royal Seals/official seals
• Fake currency, bonds or coins
• Pirated copyright goods e.g. musical tape, CD, VDO, computer software, etc.
• Obscene objects/literature/pictures
• Pornographic materials
• Counterfeit trademark goods

Restricted Goods

Restricted Goods are goods of which the import and export are restricted by law and therefore require a permit from the related government agencies. Any person imports or exports restricted goods is considered as committing offences and subject to penalties indicated in the relevant national legislation. In addition, such activity is also subjected to the offence under Articles 27 and 27 bis of the Customs Act B.E. 2469.

Although the Thai Customs is charged to stop the trading of prohibited goods and intercept the flow of restricted goods, the Ministry of Commerce in Thailand designates classes of goods that are subject to import controls, which usually take the form of permission and licensing. Although these controls are being liberalized, at present more than 50 classes of goods require import licenses from the Ministry of Commerce. These categories are frequently changed through notifications of the Ministry of Commerce. A license to import any of the restricted items must be obtained from the Ministry of Commerce prior to importation. Application for the license must be accompanied by a supplier’s order, confirmation, invoice, and other pertinent documents.

In addition to the Act imposing the above controls, a number of goods are also subject to import controls under or other relevant agencies. These include:

• The import of drugs, food and supplementary products requires prior licensing from the Food and Drug Administration, the Ministry of Health.
• The imports of weapons and ammunition, explosives, fireworks and real and replica firearms requires appropriate license from the Ministry of Interior. Other weapons such as electric shock devices must also be declared. Some of these items may require a permit, before importation.
• The Cosmetic Act stipulates that for the purpose of protection of public health, any importer of controlled cosmetics must provide the name and location of the office and the place of manufacture or storage of cosmetics, the category or kind of cosmetics to be imported and the major components of the cosmetics.
• The import or export of antiques or objects of art, whether registered or not, requires permission from the Fine Arts Department.
• The import of wild fauna, flora, fish and other aquatic fauna requires permission from the National Park, Wildlife and Plant Conservation Department, the Department of Agriculture or the Department of Fishery as the case may be.

The above information serves as a general guideline only and subject to changes without prior notice from the respective government authorities. It does not in any way replace the Thai Customs and related laws or regulations. We highly recommend that you should verify the accuracy, relevance, and completeness of the information with the concerned authorities. Hence, contact ThaiLawyers for company registration, business licenses, work permit & visa application services.

Sometimes, foreigners find it confusing on how to differentiate the visa expiration date from visa validity. Today, we discuss about the meaning of visa expiration date and how is it different from the validity of visa.

Visa expiration date is shown on the visa and it generally means that the visa is valid. Depending on the foreigner’s nationality, visas can be issued for any number of entries, from as little as one entry to as many as multiple or unlimited entries, for the same purpose of travel. When the visa is issued from multiple entries, it can be used from the date it is issued until the date it expires, for the same purpose of traveling.

On the other hand, visa validity is the time period from the visa issuance date to visa expiration date as shown on the visa. For example, if you are a foreigner who travels frequently as a tourist with a multiple entry visa, you do not have to apply for a new visa each time you want to travel to Thailand. The visa validity is the length of time you are permitted to travel to a port-of-entry in Thailand to request permission of the immigration officer to permit you to enter Thailand. However, the visa does not guarantee entry to Thailand. Each time you arrive at the port-of-entry like at Suvarnabhumi airport, an immigration officer decides whether to allow you to enter and how long you can stay. Note that only the immigration officer has the authority to permit you to enter Thailand.

Eventually, the visa expiration date should not be confused with the authorized length of your stay (permit of stay) in Thailand, given to you by the immigration officer at port-of-entry. The visa expiration date has nothing to do with your permit of stay in Thailand for any given visit.

As the Thailand Visa and Immigration rules and governing laws tend to change from time to time, it is better to seek the help of English speaking Thai Visa Experts. For your visa application needs, contact MSNA for further assistance.

The Thai Revenue Department has recently enhanced tax benefits for taxpayers who contribute to provident funds.

Previously, the employees’ income or benefits received upon the termination of their employment due to death, disability, or retirement was tax exempted. The new tax benefit eliminates the retirement requirement whereas if an employment is terminated before an employee turns 55 years old, his/her income or benefits received upon such termination is still exempted on the conditions that such income or benefits remain in the fund until the death or disability of the employee or the employee reaches 55 years of age.

The implementation of tax benefit aims to encourage long-term savings for the provident fund members. When the members have retired or left their job according to the law, any payment or benefits received upon such retirement or employment termination is tax exempted. This will improve the quality of life and promote the equality between members of provident funds and the government pension funds.

Need help on Thai taxes? Contact English speaking accountants and tax experts of MSNA.

A taxpayer who made charitable donations other than to support educational projects may be entitled to a deduction. Such qualified charitable donation must be made to one of the following institutions:

1. Temples
2. Public hospitals
3. Thai Red Cross Society
4. Public or private educational institutions
5. Government agencies (such as for the donation to the nation’s natural disaster victims)
6. Charitable institutions, government employee welfare or funds, etc. as prescribed by the Ministry of Finance

The qualified amount is:

1. The actual amount you donated;
2. The maximum amount is 10% of the amount after deducting allowances and contribution to educational projects.

Need help in filing your Personal Income Tax in Thailand? Contact MSNA for consultation.

There are a few changes being made to the tax laws in 2012, notably the Personal Income Tax rule for married couples.

Previously, Sections 57 Ter and 57 Quinque of the Revenue Code stipulated that if your marriage existed throughout the tax year, you and your spouse must file a joint tax return with the opinion that a wife may select to file her employment income, Section 40(1) income, separately.

However, on 4 July 2012, the Constitutional Court ruled that Sections 57 Ter and 57 Quinque of the Revenue Code are in breach of the constitution. Consequently, those two sections are no longer applicable. Hence, the government passed an Emergency Act to change the rules for married couples as follows:

1. You and your spouse can file a tax return jointly as before, for all types of income or
2. You and your spouse can file a tax return jointly, however either you or your spouse may select to file income from employment (Section 40 (1)) separately from the joint income by using PND.91 tax form or
3. You and your spouse can file separate tax returns for all types of income received and pay personal income tax separately. In the case where certain income cannot be clearly identified as yours or your spouse’s, the following rules shall apply:

• Sections 40(2) – 40(7) income must be proportioned equally between you and your spouse.
• Section 40(8) income can be proportioned equally or as agreed between you and your spouse. When you and your spouse agree on a proportion, you must notify the tax officer and pay income tax on that amount accordingly.

Note: If you and your spouse choose to file tax return jointly as in a) or b), you and your spouse are responsible for any tax payable incurred together. On the other hand, if you and your spouse choose to file tax return separately, each of you is responsible for any tax incurred separately as well.

Contact MSNA for preparation and filing of personal income tax returns in Thailand.