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Thailand Tax & Legal Services March 2018 Legal News Delitte Legal Representing tmrrw Inside this issue : March 2018 The Ntificatin f the Cmmittee n Cntract Re: Prescribing Residential Prperty Leasing

2561 (2018) Ntificatin f the Cmmittee n Cntract Re: The Stipulatin f Car and Mtrcycle Leasing as a Cntract-Cntrlled Business B.E.

1 Thailand Tax & Legal Services March 2018 Legal News Delitte Legal Representing tmrrw Inside this issue : March 2018 The Ntificatin f the Cmmittee n Cntract Re: Prescribing Residential Prperty Leasing Business as a cntrlled business with respect t Cntract B.E (2018) Ntificatin f the Cmmittee n Cntract Re: The Stipulatin f Car and Mtrcycle Leasing as a Cntract-Cntrlled Business B.E (2018) Applicatin fr Investment Prmtin under Measure fr Saving Energy, Alternative Energy and Reductin f Effect t the Envirnment accrding t the Ntificatin f the Bard f Investment N. 9/2560 Ministry Of Cmmerce: Rulings n Business Operatins f Freign Cmpanies in Thailand under the Freign Business Act B.E The Ntificatin f the Cmmittee n Cntract Re: Prescribing Residential Prperty Leasing Business as a cntrlled business with respect t Cntract B.E (2018) On 12 February 2018, the Cmmittee n Cntract prmulgated the Ntificatin Repealing the Ntificatin f the Cmmittee n Cntract Re: Prescribing Residential Prperty Leasing Business Requesting the Security Depsit shall be a Business which Cntrls the List in the Receipt B.E (2006) and the Ntificatin f the Cmmittee n Cntract Re: Prescribing Residential Prperty Leasing Business Requesting the Security Depsit shall be a Business which Cntrls the List in the Receipt (N.2) B.E (2016). On the same day, the Cmmittee n Cntract prmulgated the Ntificatin f the Cmmittee n

2 Cntract Re: Prescribing Residential Prperty Leasing Business as a Cntrlled Business with respect t Cntract B.E (2018) ( Ntificatin ). The details f the Ntificatin are summarized as fllws: Residential prperty leasing business under this Ntificatin is defined as the business which the business peratr leases the prperty t individual fr residential purpses with the ttal space f 5 units r mre, irrespective f whether such units are situated within the same building. Buildings are defined t include drmitry, huse, cndminium, apartment, r ther accmmdatin, excluding drmitry and htel under laws related t drmitry and htel. The building lease cntract cncluded between a business peratr and the lessee is required t include a Thai versin and must cntain the fllwing details: e.g. name and address f the business peratr and its authrized persn, name and address f the lessee, lease term, details n cnditin f leased building including assets and equipment in the building, public utility expense, rental fee, etc. The lease agreement must be executed in tw identical cpies, and ne cpy must be delivered t the lessee immediately upn the executin f the agreement. The lease agreement must nt cntain the terms and cnditins which have the fllwing meanings, fr example:- An exemptin r limitatin f the business peratr s liability frm a breach f the cntract r cmmitting wrngful act; The stipulatin f business peratr s right t claim fr advance payment f rental fee equivalent t mre than 1 mnth f rent; The stipulatin f business peratr s right t amend the rate f rental fee, public utility fee, service fee, and ther expenses befre the expiratin f the lease agreement; The stipulatin f business peratr s right t cnfiscate security depsit r advance rental payment; The stipulatin f business peratr s right t inspect the building withut having t ntify the lessee; The stipulatin f business peratr s right t terminate the lease agreement fr causes ther than material breach by the lessee; and The stipulatin f the lessee s liability fr the damage t the building, assets and equipment which was nt the lessee s fault and circumstances f frce majeure. A business peratr must attach an evidence f acceptance by the lessee n the inspectin f physical cnditin f the prperty t the lease agreement, and must deliver a cpy f such evidence t the lessee fr recrd. A business peratr shall issue the invice fr rental fee, public utility expense, service fee, and ther fees t the lessee at least 7 days in advance f the due date, and the lessee will be entitled t verify the infrmatin regarding the payable items listed in the invice. A lessee is entitled t terminate the lease agreement prir t the expiratin f the lease term, prvided that: a prir written ntice is served t the business peratr at least 30 days; the lessee must nt default in paying rental fee; and there exists reasnable grunds. Upn the expiratin f the lease agreement, a business peratr must return security depsit t the lessee immediately. Material breach in which the business peratr will have a right t terminate the lease agreement must be stipulated in red, bld, r italic fnt. The business peratr is entitled t terminate the agreement, prvided that written ntice must be given t the lessee t remedy such a breach within at least 30 days frm the date f receipt f such ntice, and the lessr fails t remedy such a breach within a designated perid f time. This Ntificatin will cme int frce frm 1 May 2018 nwards.

3 Ntificatin f the Cntract Cmmittee Re: The Stipulatin f Car and Mtrcycle Leasing as a Cntract- Cntrlled Business B.E (2018) On 12 February 2018, the Cmmittee n Cntract has issued the Ntificatin f the Cntract Cmmittee Re: The Stipulatin f Car and Mtrcycle Leasing as a Cntract-Cntrlled Business B.E (2018) ( Ntificatin ). The Ntificatin aims t cntrl a Car and Mtrcycle Hire-Purchase Agreement ( Agreement ) in rder t slve the prblem f taking advantages frm cnsumers by business peratrs. The details f the Ntificatin are summarized as fllws: The Agreement must be made in Thai, cvering details f car r mtrcycle and details n transfer f wnership, default in payment, methd f bidding r auctin and any ther relevant clauses, in accrdance with the stipulatin f the Ntificatin; The lessr shall manage t have a schedule illustrating all bligatins under the Agreement and clearly demnstrate the schedule t each lessee, the details f which shall be in accrdance with the stipulatin f the Ntificatin; The lessr is entitled t claim actual fees r any ther expenses, caused by a demand f bligatins under the Agreement and ecnmically, essentially and reasnably made, against the lessee; In case the Agreement is terminated and such terminatin allws the lessr t have the wnership ver the car r mtrcycle, the lessr is required t send an advance written ntice nt less than 7 (seven) days prir t the bidding r auctin f the car r mtrcycle t the lessee in rder t allw fr the lessee t have first pririty t purchase it with the remaining price due accrding t the Agreement. In this circumstance, the lessr is required t prvide a discunt t the lessee at the rate calculated and stipulated by the Ntificatin. Hwever, if the lessee fails t exercise this right, the lessr shall send the advance written ntice t the guarantr nt less than 15 (fifteen) days frm the date the lessee fails t exercise this right and the guarantr shall then have the same rights as the lessee; The lessr is required t send the advance written ntice f the bid r auctin t the lessee and the guarantr nt less than 7 (seven) days prir t such bid r auctin; In case the lessee agrees t make the payment fr the entire amunt due in 1 payment, withut paying in instalments accrding t the Agreement, the lessr is required t give the discunt f nt less than 50% f an interest which is nt due and the calculatin shall be made in accrdance with accunting laws; The interest rate f default in payment is reduced frm nt ver 17% p.a. t nt ver 15% p.a. The Ntificatin shall cme int frce and be implemented n 1 July 2018 nwards. Applicatin fr Investment Prmtin under Measure fr Saving Energy, Alternative Energy and Reductin f Effect t the Envirnment accrding t the Ntificatin f the Bard f Investment N. 9/2560 On 8 January 2018, the ffice f the Bard f Investment ( BOI ) annunced the clarificatin in applying fr investment prmtin under measure fr saving energy, alternative energy and reductin f envirnmental impact accrding t the ntificatin f the BOI N. 9/2560 regarding Measure t Prmte Imprvement f Prductin Efficiency in rder t increase understanding f the investr. The details can be summarized as fllws:

4 Qualificatin f the Prmted Persn The prmted persn must nt be prmted under similar measures accrding t the Ntificatin f the BOI Ns. 3/2550, 2/2552, 6/2555, 1/2556 (except fr investment prmtin under measure fr target industries) and 9/2560. The prmted persn must nt receive tax incentives r subsidies frm anther gvernment authrity fr the same purpse f this measure. In cases invlving reductin f envirnmental impact, the prmted persn must be qualified with terms and cnditins f envirnment management f the ther gvernment authrity. The rate f the pisnus substance must nt exceed the rate specified by laws. The business in categry 1.1: Manufacture f bilgical fertilizers, rganic fertilizers, nan-cated rgan chemical fertilizer and bi-pesticides cannt apply fr this measure. Terms and Cnditins f Investment The applicatin must be submitted befre imprt f machinery frm abrad r purchasing machinery in Thailand. The machinery must be new. The fllwing terms and cnditins must be cmplied with: Saving energy: The usage f energy must be reduced as per the specific prprtin and the value f the energy saved must nt less than the value f exemptin f the crprate incme tax; Alternative energy: Using alternative energy as apprpriate when cmpared t using previus energy f the prmted persn; Reductin f effect t the envirnment: Reductin f air pllutin, waste water r waste accrding t specific criteria as apprpriate in term f technlgy used withut specific minimum. The type f reductin and amunt must be significant t the envirnment; The changing f machinery must be cnsidered 2 fllwing matters: - Changing f machinery in prductin line r service line; and - Changing f supprting machinery. The investment t be calculated fr exemptin f crprate incme tax will be as fllws: In case f cmmencement f prject peratin within 3 years frm the issuance f the BOI prmtin certificate, the investment must be calculated frm the date f applying fr investment prmtin t the cmmencement date f the prject peratin; In case f cmmencement f prject peratin after 3 years frm the issuance f the BOI prmtin certificate, the investment must be calculated frm the date f applying fr investment prmtin t the deadline f cmmencement f prject peratin i.e., 3 years frm the issuance f the BOI prmtin certificate; The value f the incme t be used fr exemptin f crprate incme tax and the value f exemptin f crprate incme tax must be calculated frm the ttal amunt f net prfit fr each accunting year and must nt exceed 50% f the qualifying investment made. The incme t be used in the calculatin must ccur after btaining the investment prmtin certificate. The applicatin fr investment prmtin under this measure must be submitted with the applicatin fr investment prmtin within 30 December The terms and cnditins f investment prmtin under this measure must be cmpleted within 3 years frm the issuance f the prmtin certificate.

5 Ministry Of Cmmerce: Rulings n Business Operatins f Freign Cmpanies in Thailand under the Freign Business Act B.E Assign specialist t supervise n machine installatin in Thailand Cmpany B, registered verseas executed the Jint Venture agreement with Cmpany A, a Thai cmpany, fr Cnstructin f Factry Building accrding t cntract with the Custmer in Thailand. Cmpany B will prcure the machine t be installed in the cnstructed factry in Thailand and dispatch the specialist t cntrl and supervise the machine installatin by secndment as an emplyee f Cmpany A. This is cnsidered as a service business under the list 3 (21) under the Freign Business Act B.E and the freigner (Cmpany B) has t btain the business permissin befre carrying n this business peratin. The definitin f stre fr retail r whlesale business The place which is cnsidered as a retail r whlesale stre is any place that has cntact with custmers n the sale and purchase f gds such as cntracting fr sale and purchase f gds with the custmer, btaining the purchase rder frm the custmer, btaining and returning gds, issuing the accunting dcuments fr custmers, etc. Therefre, the issuance f invices frm many branch ffices, each ffice is cnsidered as a separate stre and requires the minimum capital fr each stre f 100 millin Baht fr 1 whlesale stre r 20 millin Baht fr 1 retail stre. Cntact Pljun Divari Directr, Delitte Legal Bangkk, Thailand Tel: +66 (0) ext pdivari@delitte.cm Prnpun Niymthai Directr, Delitte Legal Bangkk, Thailand Tel: +66 (0) ext pniymthai@delitte.cm Delitte refers t ne r mre f Delitte Tuche Thmatsu Limited, a UK private cmpany limited by guarantee ( DTTL ), its netwrk f member firms, and their related entities. DTTL and each f its member firms are legally separate and independent entities. DTTL (als referred t as Delitte Glbal ) des nt prvide services t clients. Please see fr a mre detailed descriptin f DTTL and its member firms. Delitte prvides audit, cnsulting, financial advisry, risk advisry, tax and related services t public and private clients spanning multiple industries. Delitte serves fur ut f five Frtune Glbal 500 cmpanies thrugh a glbally cnnected netwrk f member firms in mre than 150 cuntries and territries bringing wrld-class capabilities, insights, and high-quality service t address clients mst cmplex business challenges. T learn mre abut hw Delitte s apprximately 245,000 prfessinals make an impact that matters, please cnnect with us n Facebk, LinkedIn, r Twitter. Abut Delitte Sutheast Asia Delitte Sutheast Asia Ltd a member firm f Delitte Tuche Thmatsu Limited cmprising Delitte practices perating in Brunei, Cambdia, Guam, Indnesia, La PDR, Malaysia, Myanmar, Philippines, Singapre, Thailand and Vietnam was established t deliver measurable value t the particular demands f increasingly intra-reginal and fast grwing cmpanies and enterprises. Cmprising 290 partners and ver 7,400 prfessinals in 25 ffice lcatins, the subsidiaries and affiliates f Delitte Sutheast Asia Ltd cmbine their technical expertise and deep industry knwledge t deliver cnsistent high quality services t cmpanies in the regin. All services are prvided thrugh the individual cuntry practices, their subsidiaries and affiliates which are separate and independent legal entities. Abut Delitte Thailand In Thailand, services are prvided by Delitte Tuche Thmatsu Jaiys C., Ltd. and its subsidiaries and affiliates.

6 This cmmunicatin cntains general infrmatin nly, and nne f Delitte Tuche Thmatsu Limited, its member firms, r their related entities (cllectively, the Delitte netwrk ) is, by means f this cmmunicatin, rendering prfessinal advice r services. N entity in the Delitte netwrk shall be respnsible fr any lss whatsever sustained by any persn wh relies n this cmmunicatin Delitte Tuche Thmatsu Jaiys Advisry C., Ltd.

Legal News Deloitte Legal Representing tomorrow

Legal News Deloitte Legal Representing tomorrow Thailand Tax & Legal Services June 2018 Legal News Delitte Legal Representing tmrrw Inside this issue : June 2018 Eastern Ecnmic Crridr Act B.E. 2561 The Ryal Decree n the Digital Asset Businesses B.E.