Thailand Tax Alert: Thailand Moves to Revoke ROH, IHQ and ITC Tax Incentive Programs

In compliance with the obligations to implement OECD/BEPS reforms, Thailand’s Cabinet has just announced the complete cancellation of all tax benefits granted under three longstanding and significant BOI incentive programs: Regional Headquarters (ROHs), International Headquarters (IHQs), and International Trade Centers (ITCs).

According to the attached translation of the official announcement, all tax incentives granted under these programs will be cancelled. This includes all corporate incentives, which are cancelled from 1 June 2019 onwards and individual tax incentives, which are cancelled from 1 January 2020.

There is one exception which is the exemption of corporate income tax imposed on dividends and interest paid to foreign entities. Such payments will still be exempt from taxes as long as they are from profits earned before the 1 June 2019 cancellation date and paid out by 31 December 2020.

The scrapping of these programs appears to indicate that there will be no grandfathering (continuing application of old laws or rules) of previously granted benefits. This will have a significant impact on those companies that made investments in Thailand based on these incentives.

We are monitoring developments closely and will be soliciting feedback from affected clients to discuss the impacts on their businesses and assess potential planning alternatives.

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