In Part 2 and Part 3, THAI ACCOUNTANT explained about Regional Operating Headquarters or ROH and its tax privileges, old scheme and new scheme.
Again Regional Operating Headquarters or ROH is a company registered in Thailand providing managerial, administrative and technical services as well as other supporting services to ROH’s foreign branches or its associated enterprises.
What does “Associated enterprise” mean?
The Revenue Department has the following criteria in determining whether a company is an ROH’s associated enterprise.
1. Shareholding basis. A company shall be regarded as ROH’s associated enterprise if:
i. ROH holds at least 25 percent of that company’s issued capital; or
ii. The company holds at least 25 percent of ROH’s issued capital; or
iii. The company holds at least 25 percent of ROH and other company’s issued capital. In this case, ROH and the other company are regarded as associated enterprises.
2. Control basis. A company shall be regarded as ROH’s associated enterprise if:
i. ROH has control over that company; or
ii. The company has control over ROH; or
iii. The company has control over ROH and the other company. In this case, ROH and the other company are regarded as associated enterprises.
“Control” in this context is used in accordance with General Accepted Accounting Principles.
The services provided by Regional Operating Headquarters or ROH to its associated enterprises or its branches that qualify for tax privileges are as follows:
Managerial services, administrative services, technical services, and supporting services. Supporting services include:
- General administration, business planning and coordination
- Procurement of raw materials and components
- Research and development of products
- Technical support
- Marketing and sales promotion planning
- Personnel management and regional human resource training
- Financial advisory services
- Economic or investment research and analysis
- Credit control and administration
- Any other activities stipulated by the Director-General of the Revenue Department
If you have any questions regarding tax and accounting, please contact MSNA, a Thai accounting firm that provides accounting services to SME’s in Bangkok Thailand.