BOI Notification on improvement of benefits according to merit-based incentives and assistance measures in flooding events
On 14 March 2017, Board of Investment (BOI) issues BOI Notification No. 2/2560 and No. 3/2560 which provide the following important points:
BOI Notification No. 2/2560 subject: improvement on additional rights and privileges subject to merit-based incentives increases the rate of proportion, which is applied for computation of exempted corporate income tax, namely,
- Research and development of technology and innovation shall use proportion in the rate of 300% of investment or expenses.
- Fee of technology license developed by domestic sources, high technology training, development and technical assistance in local suppliers (, whose shareholders shall hold shares not less than 51% of registered capital) as well as product and packaging design shall use proportion in the rate of 200% of investment or expenses.
As for BOI Notification No. 3/2560 subject: assistance measures for a promoted person affecting an impact of flood, BOI has authority to approve of the following essential measures:
- Exempt from import duty of imported machinery which is substituted for flood-damaged machinery. It shall be single import of both new and used machinery (the age of used machinery shall not more than 10 years and such used machinery shall have certificate issued within 2 years as of the date an institute approved.) The promoted person shall submit the import entry, the certification, assessment evidence on damage of machinery with damages and photos to BOI within 29 December 2017. Moreover, if import period of machinery still exists, the promoted person can employ such period or request to expand the import period. If import period of machinery is expired, the import period shall start from the date the promoted person requests rights and privileges to the end of 2 year as of the approval date.
- Increase production capacity in accordance with the actual production capacity of imported machinery
- Write off raw materials and necessary materials which are flood-damaged without any taxation and the evidence on written-off such materials shall be submitted within 29 December 2017.
Amendment on provisions of Revenue Code and on E-commerce business tax, transfer pricing
Prime Minister with National Legislative Assembly approve of the establishment of ad hoc committee group to enact and amend Revenue Code. And the amendment can represent to Cabinet for approval in this September.
The purposes of amendment are to
- Upgrade Revenue Code in certain matters, such as assessment, appeal, prescription, supervision and connection the information of Revenue Department and that of other agencies
- Amend new matters, such as E-commerce and social media taxation, anti-measures on transfer pricing
- Amend provisions of Revenue Code so as to comply with other tax laws, such as excise tax and customs laws.
In part of E-commerce taxation, there will be a specific chapter of this matter in Revenue Code and an establishment of supervisory agency to control transactions on the Internet. The agency will examine through e-payment and have a buyer who purchases a product to remit tax to Revenue Department. Moreover, in case of remitting advertisement fees to foreign entrepreneur, such as Facebook, Google, Youtube, a company remitting money to overseas shall deduct withholding tax through e-payment on the Internet.
Furthermore, there will be anti-measures on transfer pricing, such as limitation of transfer pricing in a form of loan interest and portion of liability per capital of share sale between parent and subsidiary companies which can be deductible expenses, and measures on Thin Capitalization.
Revenue guideline on the consideration of justifiable ground
Revenue Guildline No. Mor Gor 53/2560 provides main issues of justifiable grounds under Section 67 Ter of Revenue Code which a company or juristic partnership shall not be liable for surcharges, as follows:
- There are following events taking place and causing the company or juristic partnership to underestimate net gain exceeding 25 percent of net gain arising from business in an accounting period when comparing with net gain (or total net gain or promoted business) in the same accounting period:
- uncontrollable events which happen within the last 6 months of the accounting period, such as a company having no income, decreasing of interest rate, uncertainty of export, etc.
- a company or juristic partnership has gain from sales of property which is used in business after the expired date of filing half-year corporate income tax return
- the amount of estimated net gain filed in half-year tax return is not less than 50 percent of corporate income tax filed in the previous accounting period, or
- the amount of estimated net gain is not less than net gain filed in the previous accounting period and is filed in half-year tax return not less than 50 percent of corporate income tax filed in the previous accounting period, or
- the underestimation of net gain of promoted business, which does not obtain corporate income tax exemption, is not exceeding 25 percent of net loss of that business, or
- the underestimation of net gain under additional tax return filed after the scheduled time of filing tax return is exceeding 25 percent of net gain in that accounting period, or
Index of legal movement in relation to business
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