The Revenue Department will seek tariff
measures to encourage Thai businesses to invest abroad, says director-general
Satit Rungkasiri.
By
2015, the Asean Economic Community will take effect. Integrating the 10
countries will bring opportunities for Thailand to expand investment across the
region and to import materials at lower cost to serve plants at home.
"There
are many ways to encourage more investment overseas," said Mr Satit.
"One
thing we can do is try to remove the constraints that discourage firms from
going abroad."
In
fact, the department has granted some tariff privileges for Thai businesses
already. For example, it will waive the tax on dividends from Thai investment
overseas.
The
conditions are the firm must have a Thai-nationality shareholder of at least
25% of shares.
It must
be subject to corporate income tax in the foreign country at a rate of at least
15%.
But in
order to support further investment of Thai businesses, the existing measures
must be beefed up to shield firms from redundant taxes.
For
instance, some Thai businesses have invested abroad through holding companies
set up especially for the purpose, as some countries do not tax the holding
company's corporate income but its profit instead.
When
the investors transfer the profit back to Thailand, however, the holding
company is taxed on its investment dividend, meaning it faces dividend tax
twice.
Also,
the department is considering revising some tax laws to seal loopholes.
In
another development, Mr Satit dismissed concerns over shrinking tax revenue as
a result of the reduction in corporate income.
He
reasoned the government will lose about 150 billion baht from tax cuts, but
that will be recouped by the government's stricter inspection of taxpayers.
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