Recently, some changes were made to the conditions and tax incentives of Regional Operating Headquarters (ROH). The changes are applicable to all ROH’s registered in accordance to Royal Decree No. 508, dated November 2010.
ROH’s need to always meet all of the following conditions otherwise their rights to corporate income tax reduction and exemption will be revoked retroactively, starting from the first accounting period:
- They have to have a paid up capital of THB 10 million or more at the end of each accounting period.
- They must provide qualifying services to their overseas associated enterprises or foreign branches.
- Their associated enterprises must have real business operations, with a physical presence and staff, as notified to the Thai Revenue Department
- They have to notify their ROH status in accordance with the rules, procedures, conditions and timeline prescribed by the Director-General of the Revenue Department.
- They must pay their staff the compensation at the required level from the third accounting period onwards.
The ROH’s that fail to meet any one of the following conditions in any accounting period will lose their rights to corporate income tax reduction and exemption for that particular accounting period:
- They must pay to recipients in Thailand operating expenses related to the ROH operations of at least THB 15 million or capital expenditures of at least THB 30 million in the accounting year.
- Their employees must have the skills prescribed by the Director-General of the Revenue Department.
- They must employ the required number of staff by the end of the third accounting period.
The ROH’s that are dissolved within 5 accounting periods from the date of registration as ROH will lose their rights to the corporate income tax reduction and exemption retroactively from the first accounting period.
Contact MSNA for accounting and tax consulting.