Thailand International Headquarters (IHQ) Tax Structures
Update | June 2016
On 02 June 2016, Royal Decree (No 612) was gazetted, enhancing the tax exemptions for IHQs, by prescribing an exemption from Specific Business Tax on revenues derived from the provision of financial services. This Tax Law Guide has been updated for this new law.
On 01 May 2015, Royal Decree (No 586) was gazetted, putting into effect the Government resolutions for the introduction of tax concessions for International Headquarters structures in Thailand. This Tax Law Guide summarizes the prescriptions in Royal Decree (No 586).
Summary of the Structure
An IHQ is a company incorporated under the laws of Thailand for the purpose of engaging in a business of:
Support services is defined to mean:
Financial services is defined to mean:
The Tax Concessions
For 15 financial years from the date of approval by the Thailand Revenue Department, an IHQ that complies with the conditions shall be entitled to the following tax concessions:
* As prescribed in Royal Decree (No 612) gazetted on 2 June 2016 and applying as from 2 May 2015 (the date of commencement of the IHQ tax concessions law).
An IHQ company claiming the tax concessions under Royal Decree (No 586) shall:
Existing ROH Companies
Royal Decree (No 586) also provides existing Regional Operating Headquarters (ROH) companies receiving tax concessions under Royal Decree (No 405) the ability to file an application for registration as an IHQ company and terminate their ROH tax concessions without being penalized for doing so.
As a company claiming tax concessions in Thailand, it is likely that an IHQ company will be rigorously investigated by the Revenue Department. If the tax audit officers find any of the rules have not been fully complied with, the IHQ company could lose its entitlements to the tax concessions, and be required to pay back-taxes at the normal rates of tax plus penalty and surcharge.
This Tax Insight is general information only. It should not be used to determine any particular matter without consulting with an experienced Thailand tax advisor.