Finance Minister rejects call for “Foreign income tax reduction”

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BANGKOK, 5 July 2012  – Mr. Kittiratt Na-Ranong, the Finance Minister has rejected a call submitted by the private sector, for tax reduction on corporate income earned from overseas investment, saying that large companies with subsidiaries are already entitled to corporate income tax exemption. 

Mr. Kittiratt has insisted that the Ministry of Finance will not accept the request, because most of the large companies which have subsidiaries in foreign countries are already entitled to corporate income tax exemption, so there is no need for the Finance Ministry to reduce tax on their revenue remitted home.

He went on to say that Finance Ministry has scrupulously considered the request, but unfortunately it could not be approved, because the current law of Thailand is already exempting dividend tax for registered subsidiaries in Thailand and allowing the 50 percent dividend tax reduction for those subsidiaries whose mother companies are based in Thailand.

Furthermore, many private companies have their subsidiaries in foreign countries due to the intention of outsourcing and cost saving, because those countries have lower tax policy than Thailand. As a result, income tax exemption will have to be carefully thought through, plus Thailand is already reducing its corporate income tax to only 23 percent which is expected to drop down to 20 percent in 2013.