Update New laws & regulations

Transcription

1 16th Annual Conference Update New laws & regulations Maximise Shareholder Value through Effective TAX Planning 2015 Shangri-La Hotel

2 Agenda 1.Tax rate update PIT, CIT & VAT 2.Various amendments 2.1. Real estate development business Taw Paw 228/ Taw Paw 148/ Loss on investment - Paw 146/ Bad debt provisions of financial institutions upon undertaking a corporate reorganization Slide 2

3 Agenda 2.4. SBT exemption on interest earned from group companies 2.5. Double deduction for exhibition fairs 2.6. Financial aid received from the government 2.7. Income received from the government to invest in the permanent prevention of flooding, etc Additional information required on tax invoices, credit notes, debit notes, output and input VAT reports Slide 3

4 Agenda day extension for filing online tax returns 3. Draft Act to amend the Revenue Code / Tax policy Slide 4

5 Tax rate update PIT, CIT & VAT Slide 5

6 1. Tax rate update Personal income tax (PIT) Royal Decree No. 575 PIT rates effective for the two tax years of 2013 and 2014 as shown in the table below Net income (Baht) PIT rates (%) Maximum cumulative tax of each level 0-150,000 5* - 150, , , , , , , , , ,000 1,000, ,000 1,000,000 2,000, ,000 2,000,000 4,000, ,000 Over 4,000, *exempted according to Royal Decree No. 470 Slide 6

7 1. Tax rate update Personal income tax (PIT) & Corporate income tax (CIT) At the Cabinet meeting on 16 Sep 2014, an extension of the reduction of the PIT and CIT rates was approved, as follows: PIT rates for the tax year 2015 will remain at the same reduced rates as the tax years 2013 and CIT rate will remain at 20% for accounting periods starting on or after 1 Jan 2015 but not later than 31 Dec Slide 7

8 1. Tax rate update VAT The National Council for Peace and Order Notification No. 92/2557 VAT rate will remain at 7% from 1 Oct 2014 to 30 Sep Slide 8

9 Various amendments Slide 9

10 2.1 Real estate development business Taw Paw 228/2557 Taw Paw 228 replaces clause 3.7 of Taw Paw 1/2528 Effective for accounting periods starting on or after 1 January 2014 The following paragraph is added to the regulation: The computation of revenue and expenses of a juristic company or partnership, which is a Publicly Accountable Entity according to accounting standards, that carries on the business of sale of immovable property, the accrual basis shall be applied pursuant to Clause 2 by computing the related revenue and expenses according to generally accepted accounting methods. Slide 10

11 2.1.2 Paw 148/2557 Paw 148/2557 replaces Paw 61/2539. Effective for accounting periods starting on or after 1 January 2014 Below are the changes: Old: Paw 61/2539 New: Paw 148/2557 Clause 3 and 4 (3): Recognition of revenue and expense It conflicts with clause 3.7 of Taw Paw 1/2528, which was amended by Taw Paw 155/2549 Clause 3 and 4 (3): Recognition of revenue and expense It is amended to be in accordance with clause 3.7 of Taw Paw 1/2528. In addition, the computation of revenue and expense of a company or juristic partnership which is a Public Accountable Entity and carries on the business of selling immovable property should be determined on the accrual basis according to GAAP. Slide 11

12 2.1.2 Paw 148/2557 Old: Paw 61/2539 New: Paw 148/2557 Clause 5 and 6: Unit cost Clause 5 and 6: Unit cost Land Cost in proportion to each area of land sold (no mention of construction items) Condominium Cost in proportion to revenue derived from the sale of each condominium unit Land and/or construction items Cost in proportion to each area of land sold or revenue from land and/or construction items sold Condominium Cost in proportion to area sold or revenue derived from the sale of each condominium unit Slide 12

13 2.1.2 Paw 148/2557 Old: Paw 61/2539 New: Paw 148/2557 Clause 5 (7) : Advertising and promotion expenses Clause 8 (3): Advertising and promotion expenses Before income earned Period expense Part of unit cost After income earned Period expense Slide 13

14 2.2 Paw 146/2557 Paw 146/2557 repeals Paw 135/2551. Effective on 18 March 2014 Result Recognition of loss on investment in share capital increase of debtor company or conversion of debt to equity must be according to general law and regulations. Slide 14

15 2.3 Bad debt provisions of financial institution when undertaking a corporate reorganization Royal Decree Nos. 573 & 574 Exemption: CIT Entitlement: Due to amalgamation or entire business transfer of financial institutions, CIT exemption is granted on the provisions set aside in the company that has been merged or the transferor company that has to register for dissolution of its business. The amount of the tax exempt provisions will not be allowed as a tax deductible expense of the transferee company. Effective date: 24 December 2013 Slide 15

16 2.4 SBT exemption on interest earned from group companies Royal Decree No. 571 Previous guideline Paw 26/2534 Royal Decree No.571 Paw 26/2534 To be enacted as the Royal Decree The only change: for associate company or associate juristic partnership - the six month period includes the previous companies or juristic partnerships duly merged or the previous companies or juristic partnerships who are the transferors of the entire businesses. Effective date 1 January 2013 Slide 16

17 2.5 Double deduction for exhibition fairs Royal Decree No. 569 Benefit Double deduction for CIT on expenses paid from 1 Jan 2013 to 31 Dec 2014 Conditions Expenses relating to renting or building an exhibition booth, for insurance, freight, transportation of goods or equipment used at a fair, exhibition or expo which takes place in a foreign country from 1 Jan 2013 to 31 Dec 2014 The corporate entity has received a letter issued by a government agency confirming its participation. Slide 17

18 2.6 Financial aid received from the government Royal Decree No. 567 Benefit Personal and corporate tax exemptions to individuals or corporate entities affected or damaged as a result of political violence or unrest in the southern border provinces Applicable period Assessable income obtained from the government in or after the tax year 2012 for individuals or for accounting periods beginning on or after 1 Jan 2012 for corporate entities Slide 18

19 2.7 Income received from the government to invest in the permanent prevention of flooding or other natural disasters that may take place in Thailand Royal Decree No.570 Benefit Personal or corporate income tax exemption Conditions Individual or corporate entity - cannot take depreciation as expense. Applicable period Income received from 1 Jan 2011 onwards Slide 19

20 2.8 Additional information required on tax invoices, credit notes, debit notes, output and input VAT reports VAT Notification Nos Additional information required Tax identity number of purchaser* Head office or branch number of seller and purchaser* *Applicable to a purchaser who is a VAT registered operator Effective date 1 January 2015 Slide 20

21 2.9 8-day extension for filing online tax returns Clarification of the RD dated 17 Jan 2014 Applicable periods Applicable to online tax filings which are due from 1 Feb 2014 to 31 Jan 2015 Slide 21

22 Draft Act to amend the Revenue Code /Tax policy Slide 22

23 3. Draft Act to amend the Revenue Code/Tax policy Draft Act to amend the Revenue Code (already approved by the National Legislative Assembly ) Section 63 Section 56 Tax policy VAT rate expected to be increased on 1 October 2015 Extension of LTF tax privilege (currently will expire in 2016) Tax deductible expenses for domestic tour packages and accommodation not exceeding Baht 15,000 per person per year Double deduction for seminars or training in Thailand for corporate entities Inheritance tax Property tax Slide 23

24 Contact Mr. Somsak Anakkasela Partner Tel: +66 (0) Slide 24

25 Thank you 2014 PricewaterhouseCoopers Legal & Tax Consultants Ltd. All rights reserved. 'PricewaterhouseCoopers' and/or '' refers to the individual members of the PricewaterhouseCoopers organisation in Thailand, each of which is a separate and independent legal entity. Please see for further details.