Expressway and Rapid Transit Authority must pay substantial damages
A Thai government body which supervises the country’s
expressways has lost a damage lawsuit, and has been ordered to pay more than
one billion baht compensation to a private company.
The Bangkok Civil Court has ruled that the Expressway and
Rapid Transit Authority of Thailand (ERTAT) should pay more than one billion
baht compensation to Bangkok Express Way Co. Ltd. (BECL).
BECL, an operator involved in Bangkok’s second phase
expressway, filed a lawsuit against the ERTAT six years ago for breach of
contract and causing the company severe damage by ordering BECL to lower its
fee on the second phase of the expressway, which had cost the company 360.90
million baht.
In addition, the court has ruled that BECL be also
compensated for its loss of revenue equivalent to the difference between the
contracted fee and the lower fee ordered by the ERTAT since 16 July 2000,
which was estimated at 500,000 baht a day on average. These total more than
one billion baht.
The ERTAT will appeal, said the lawyer acting for the
authority, Issara Limsiriwong. The case became notorious after local
newspapers published the contract. Critics claimed the contract had been
written so that only the BECL could benefit. (TNA)
Tourism loses 10 billion baht monthly from tsunamis
Thailand estimates that the tourist industry in
Thailand’s southern Andaman provinces will lose ten billion baht a month
as a result of last month’s tsunami disaster.
“In order to keep the losses to a minimum, efforts to
restore the affected tourist spots must be carried out as quickly as
possible,” the governor of the Tourism Authority of Thailand (TAT),
Juthamas Siriwan said.
Many European tourists have cancelled their trips to
Thailand, and others have sought reassurance about the quality of the
drinking water in the areas following the tsunami disaster.
The TAT’s most urgent task is to restore consumer
confidence in Thailand’s major markets, including Sweden and Japan.
Juthamas plans to travel to Sweden later this month to offer Thailand’s
condolences to the country’s government and people. A number of Swedish
tourists perished in the tsunami disaster.
The TAT governor plans to take a group of Japanese
journalists and tour agents to the affected provinces, including Phuket,
Phang-nga, Krabi, Trang, Ranong and Satun, on January 24 to see first-hand
the affected areas. (TNA)
Nurseries to be built in industrial estates
Nurseries will be built in industrial estates across
Thailand to provide care for young children of low-income laborers.
Another 30 industrial estates in the country will have
new nurseries this year under a joint ministerial child welfare program, the
permanent secretary for Labor, Charupong Ruangsuwan, recently announced.
There are already 66 nurseries in industrial estates and large construction
sites across the country.
Under the program, the provision of child care should
allow their parents to work efficiently, without worrying about the
children. Conditions in more than 16,000 existing nurseries will also be
improved under the child-welfare development scheme, Charupong said.
The program is a join project involving the Ministries of
Labor, Interior, Education, Public Health, and Social Development and Human
Security.
A women’s rights activist, Wilaiwan Sae-Tia has urged
the government to be flexible and admit children registered in different
areas to attend the nurseries. Nurseries should also be allowed to operate
at odd hours to accommodate children whose parents are working overtime, she
suggested. Representatives of laborers should also be allowed to take part
in operating these nurseries, Wilaiwan added. (TNA)
Fishermen affected by tsunami
to be compensated
Thailand’s government plans to compensate the
country’s fisherman for their losses as a result of last week’s tsunami
disaster according to a government minister. The deputy agriculture
minister, Newin Chidchob has finished an early assessment of the damages
done to the fishing and coastal farming by the tidal waves.
“In principal, we can compensate them right away. A
small fishing boat will get 30,000 baht, a big ship will get within 95,000
baht and we will pay 12,000 baht to each damaged coastal fish farms. But
compensation for damage on a larger scale will need further
discussion,’’ Newin said.
On the prime minister’s instructions, the committee
which oversees the compensation scheme is reviewing its regulations and
conditions to help fishermen get back on their feet, said Newin. The
official preliminary estimate of the cost of the disaster to ships and
coastal fishing is over one billion baht. ‘’I understand that 70 percent
of affected fishermen have registered for help,” he said. (TNA)
Thailand opts for new beach management
Thailand’s provincial authorities are considering a new
plan to regulate major beaches on the country’s southern island resort of
Phuket. The plan will initially involve Patong and Kamala beaches, Phuket
Governor Udomsak Asavarangura has advised Prime Minister Thaksin Shinawatra.
Businesses on the beaches, including the rental of
parasols and beach chairs, have long been conducted haphazardly, said the
governor. Most of Phuket’s beaches were severely damaged by tsunamis on
the morning of 26 December.
The Phuket governor met representatives of relevant state
agencies and private organizations to discuss ways to help improve
conditions on the beaches, starting with Patong and Kamala. Details of the
plan would be ready in a week, and it should be successfully implemented
within two months, the governor said.
Business on the beaches must be conducted in a
transparent way, with no intervention from local influential figures, as was
the case before, the governor warned. (TNA)
Personal income tax
of expats in Thailand
Graham Macdonald
MBMG International Ltd.
Expatriates living in Thailand are sometimes able to
enjoy favourable tax treatment, but at other times not. As we enter a New
Year and therefore a New Thai Tax Year, it’s worth reminding ourselves
about Thai taxation rules and principles to ensure that our arrangements are
as tax-efficient as possible.
The starting point should always be the Thai Revenue Code
(RC) to ascertain whether or not the income is taxable in the Kingdom of
Thailand, at which rate, and how. Secondly, we should also consider whether
any taxation liability arising under the RC is modified in any way by the
operation of the many and various tax treaty laws (such as double taxation
agreements).
Thai Revenue Code
Under the RC, every person (whether or not they are
resident or non-resident) who derives income from employment in Thailand, or
from the business of an employer in Thailand, will be subject to Thai tax
irrespective of where that income is actually paid or received (whether or
not that income is paid within or outside of Thailand).
Any individual who resides for 180 days or more in
Thailand for any tax year (i.e. calendar year) is deemed to be Thai resident
for income tax purposes. Thai residents are taxed in Thailand on their
worldwide income (i.e. including not only income from Thailand but also
income from abroad). However, income derived from employment carried on
abroad is only subject to tax in Thailand if it is remitted to Thailand
within the same taxable year. In other words, if a salary corresponds to a
work performed outside Thailand and it is not paid in Thailand and then it
is also not remitted to Thailand in the same tax year, it isn’t liable to
tax in Thailand. This provides tremendous tax-planning opportunities for
employees who perform some or all of their work outside Thailand, can be
paid outside Thailand for that work and do not need to remit the money
received to Thailand during the same calendar year.
For that income which is liable to Thai tax, Thai
residents pay a progressive tax rate ranging from 5-37%, which applies to
personal income tax of resident individuals (although any expatriate who
works at a designated Regional Operating Headquarters (ROH) established in
Thailand can opt to be taxed at a flat rate of 15% for 2 years instead of
the normal progressive tax rates).
From the above it follows that non-residents are taxable
in Thailand only for the income derived from employment or business in
Thailand, and this income is taxed at a flat rate of 15% (again for those
spending less than 180 days a year in Thailand, this presents excellent
planning opportunities, especially bearing in mind that all income for work
performed outside of Thailand [even for an employer established in Thailand
etc] is not subject to Thai tax.).
Once the liability has been determined under the RC, then
the effect of DTAs needs to be considered.
Double Taxation Agreements
Thailand has executed Double Taxation Agreements (DTAs)
with 45 countries. These can significantly mitigate the amount of tax
payable to the Thai Revenue (although not necessarily the overall tax
payable). As a general rule, Thailand has taxing power for employment income
derived from working in Thailand by a resident of the other treaty country.
An exception to this general principle is the “183-day rule.” If this
rule applies, Thailand has no taxing power for the income of a DTA country
resident whose income is derived from employment in Thailand.
Under the 183-day rule, Thailand will not have taxing
power if all of the following three conditions are met:
1. The employee is present in Thailand for no more than
183 days in any 12 month period; and
2. The income was not paid by or on behalf of a Thai
resident. Normally, when an expatriate is on the payroll of an enterprise in
Thailand, Thailand will have taxing power and the 183-day rule cannot be
invoked; and
3. The income was not borne by a Thai Permanent
Establishment (PE) of the foreign employer. A PE is a fixed place in which
the business (registered or not) is either wholly or partially undertaken
and usually includes a branch, office, factory, warehouse or mine.
Other Methods of tax
planning
Recent legislative changes have created tax-planning
opportunities using Thai life insurance based savings and annuity schemes.
In this scenario the tax breaks can mean that a higher rate taxpayer who
effects an investment into a deposit type fund allied to a 37% tax saving,
invests the annual married couple maximum and ends up in 10 years with a
tax-free amount in excess of THB 530,000 in return for a total net
investment of THB 315,000. In other words, the tax benefits can enhance a
deposit style investment with a rate of return of say 3% per year to over
25% per year simply by making use of the tax breaks, or even with no growth
a guaranteed return in excess of 22.7% per year.
For further information please contact Graham Macdonald
at [email protected]
The above is produced for guidance only and the data and
research was produced from sources and articles that are believed to be
reliable. However, neither MBMG International nor its officers can accept
any liability for any errors or omissions in the above article not bear any
responsibility for any losses achieved as a result of any actions taken or
not taken as a consequence of reading the above article. The above is
produced for guidance only and neither MBMG International nor its officers
can be held responsible for the consequences of any action taken or not
taken as a result of reading the above article.
Forecasters put tsunami damage
at 30-50 billion baht
On January 5 the Economic and Business Forecasting Center
at the University of the Thai Chamber of Commerce cut its 2005 growth
forecast to 5.2-5.8 percent, while estimating that the tsunamis had slashed
30-50 billion baht off the Thai economy.
Announcing the estimate, the center’s director Thanawat
Polvichai said that the tsunamis would mainly affect sectors such as
fisheries and tourism, and would serve to cut the country’s gross domestic
product (GDP) growth next year by around 0.3 percent.
This figure accords with earlier estimates by the
government’s Fiscal Policy Office (FPO), and represents a considerably
more optimistic outlook than that put out by an international investment
bank, JP Morgan, which has predicted that the tsunamis could slash
Thailand’s GDP growth to zero.
Thanawat said that as a result of the tsunamis,
Thailand’s current account balance was likely to fall from an estimated
US$3 billion to around US$2.3-2.5 billion.
However, he also noted that a budget of 30-40 billion
baht needed to repair the country’s six southern provinces affected by the
tsunamis—Phuket, Phang-nga, Krabi, Trang, Ranong and Satun would ensure
that money and employment would flow into the region.
The university’s Economic and Business Forecasting
Center predicts that the local tourism industry will suffer by between 15
billion and 30 billion baht as a result of the tsunamis, with tourist
numbers down by 25-50 percent over the coming six months.
The retail industry is also likely to lose around 10
billion baht due to the lower purchasing power of people living in the
tsunami-hit areas, while the fisheries industry looks set to lose around 3-5
billion baht. (TNA)
Advertorial: A secure alternative -
Safe Independent
For many residents and visitors to Pattaya the question
of where to safely store those important items and documents is perplexing,
particularly given the level of security in some hotels. However, there is
an alternative available - Safe Independent.
The
friendly staff at Safety Independent offer peace of mind.
This new company in Jomtien is the brainchild of a Dutch
expat who had experienced losses here in Pattaya.
Located in the Jomtien Complex Condotel, the company
offers a variety of services including safety deposit boxes from 300 baht
per month. The added security features to this particular service extend
beyond the unique 2 key system, which customers must log each time they
access their deposit box, as the premises in under constant 24 hour
surveillance through closed circuit TV and security guards. There is also an
alarm system on site that is linked directly to the Dongtan police box and
the boxes are both insured and fireproof.
“I wanted to provide a secure alternative for both
residents and visitors. There are only two authorized users for each box and
it is recorded on the photo ID database. We take every precaution and do not
recommend that people keep cash or jewelry in the safety deposit boxes,”
says the owner.
There are also private cubicles in which people can
privately place their items inside, as well as lock the boxes for extra
protection.
“If someone needs to get to their box, we have a 24
hour emergency number and in the event they lose their key we have a spare
which is kept outside the premises,” added the owner.
Mailboxes from 1,000 baht per year and DHL Courier
services are also available for those who require them, as well as lockable
storage space from 1 cubic meter up to 15 cubic meters.
“Some people stay here only a few months per year and
need a place to store their golf clubs, so we provide that as well.”
Safe Independent is open Monday to Saturday from 8.30 a.m. to 6 p.m. It
is located at the Jomtien Complex Condotel, 414/20 Thappraya Road, Jomtien.
Tel. 038 303 863.
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