Thailand International Trading Center (ITC) Tax Structures
Tax Insight | May 2015
On 1 May 2015 Royal Decree (No 587) was gazetted, putting into effect the Government's resolutions to provide tax concessions for International Trading Center (ITC) structures. This Tax Insight summarizes the laws in Royal Decree (No 587).
Summary of the Structure
An ITC is a company that is incorporated under the laws of Thailand for the purposes of:
International Trading of Goods
International trading of goods is defined to mean a business of purchasing raw materials, goods or components for international sale to affiliates in foreign countries.
Services Relating to International Trading of Goods
Services relating to international trading of goods is defined to mean the following:
The Tax Concessions
For 15 financial years from the date of the Thailand Revenue Department's approval an ITC that complies with the conditions is entitled to the following tax concessions:
(1) Provided the goods do not enter Thailand.
(2) Provided the dividends are paid out of net profit that is exempt from tax.
An ITC claiming the tax concessions under Royal Decree (No 587) shall:
As a company claiming tax concessions in Thailand, it is highly likely that an ITC company will be rigorously investigated by the Revenue Department tax audit officers. If the officers find that any of the prescribed rules has not been fully complied with, the ITC could lose its entitlements to the tax concessions, and could be required to pay back-taxes at the normal rates of tax plus penalties 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.