Thailand enacted a new tax regime for International Headquarters (IHQ) and International Trading Centers (ITC) under Royal Decree No. 586 on 1 May 2015. The regime replaces the previous regime for Regional Operating Headquarters and International Procurement Centers, relaxing certain foreign ownership and activity limitations. Companies operating under the previous regimes may apply for the new regime incentives without claw back provisions.
Under the regime a company may be considered an IHQ and ITC depending on the qualifying activities it performs. The conditions are essentially the same and the benefits apply based on the activities of the company.
An IHQ is a company that provides management, technical and support services or treasury center services to associated companies or branches overseas. An ITC is engaged in trade and trade-related services.
The tax benefits provided include:
In order to qualify as an IHQ or ITC and obtain the benefits, a company must submit an application to the Director-General of the Thai Revenue Department, and meet the following conditions:
Unlike the previous regime, if a company fails to meet the conditions in a particular year, the benefits will not apply for that year only. Under the previous regime, failure to meet the conditions would result in the benefits being clawed back from the first accounting year.
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