New Regulations and Potential Laws on Foreign Income Tax in Thailand
Recent developments in Thailand’s tax laws signal a shift in how foreign income will be taxed for individuals residing in the country. These changes, driven by international tax standards and Thailand’s participation in global tax transparency initiatives, impact both current and potential foreign residents. Below is an overview of the new regulations and potential laws regarding foreign income tax:
1. Changes to Foreign Income Taxation (Effective 2024)
Under Director General Orders No. Por 161/2566 and Por 162/2566, significant changes to how foreign income is taxed in Thailand will take effect starting January 1, 2024:
- Remittance-Based Taxation: Previously, individuals residing in Thailand for 180 days or more were only subject to tax on foreign income if it was remitted to Thailand within the same calendar year in which it was earned. Many leveraged this by deferring remittance to avoid taxation.
- New Rule: From January 1, 2024 onwards, foreign income brought into Thailand will be taxed in the year it is brought into Thailand, regardless of when the income was earned. This eliminates the previous tax deferral strategy, marking a shift from “Same Calendar Year Remittance” to “Remittance” basis taxation.
2. Potential New Law on Foreign Income Arising Abroad
Looking further ahead, there are discussions about a more comprehensive change to Thailand’s foreign income taxation:
- Arising Income Concept: The proposed amendments, still in early stages, could require individuals residing in Thailand for more than 180 days to pay tax on foreign income, even if that income is not brought into Thailand. This represents a shift from taxing remitted income to taxing “The Arising Income” (income earned abroad), regardless of its movement into Thailand.
- International Transparency: These changes are driven by Thailand’s commitment to the Global Forum on Transparency and Exchange of Information for Tax Purposes. Through automatic exchanges of financial information between member countries, Thailand’s tax authorities will have access to detailed data about financial accounts and income held abroad by its residents.
While these amendments are still in the early legislative stages, if approved by Parliament, this potential law could take effect as early as 2025, impacting foreign nationals residing in Thailand as well as Thai citizens with income abroad.
3. Exemptions for Long-Term Foreign Residents
Despite these upcoming changes, exemptions exist for certain long-term foreign residents in Thailand who meet specific criteria set by the Thai government. These exemptions aim to attract and retain foreigners who contribute to the country’s development, offering tax relief to qualifying individuals.
4. Planning for the Future
As Thailand’s tax regime becomes more stringent, tax planning will play a critical role for individuals with foreign income. The new rules make it essential to adopt forward-looking strategies to remain compliant and mitigate tax burdens.
At ILAWASIA, we have over 17 years of expertise in taxation, and we stand ready to assist clients with navigating these new tax regulations.
Our services include:
- Expert Tax Legal Advice
- International Tax Planning Strategies
- Compliance with Foreign Income Tax Regulations
If you are a foreign national living or planning to live in Thailand, or a Thai citizen with foreign income, please consider reaching out to ILAW ASIA for personalized guidance and professional support to help you stay ahead of the evolving tax landscape.
Authors
Tanadee Pantumkomon, Partner
Wachinorot Siladet, Associate Contact
Detail: corporate@ilawasia.com
Remark: This newsletter is not intended to provide legal advice. It is for informational purposes only and should not be considered a substitute for professional legal consultation.
ILAWASIA ranked in the Asia M&A Rankings 2024
ILAWASIA Co., Ltd. is honored to announce that our head office has been recognized as one of the Notable Firms in the Asia M&A Rankings 2024, as surveyed by Asian Legal Business (ALB). This prestigious recognition, featured in the September 2024 issue of ALB both online and in print, places us among an elite group of 25 global, regional, and local firms in Thailand, spotlighting our expertise and leadership in the field of Mergers & Acquisitions.
This achievement underscores our unwavering commitment to delivering excellence in legal services, particularly in the dynamic and high-stakes area of M&A transactions. Over the years, ILAWASIA has built a strong reputation for guiding both local and international clients through complex mergers, acquisitions, and corporate restructuring deals. We take great pride in providing bespoke legal solutions that address our clients’ strategic business objectives while navigating the intricate regulatory landscapes across various jurisdictions.
As one of the leading legal service providers in the M&A practice area, this recognition not only highlights our technical expertise but also reflects the dedication of our talented team, who continuously strive to uphold the highest standards of service. Our focus on client success, innovation, and cross-border collaboration remains at the core of our practice.
We extend our deepest gratitude to our clients, partners, and colleagues for their continued trust and support. This recognition reinforces our determination to further enhance our services and remain a trusted advisor in the M&A sector. We look forward to continuing to lead the way in delivering impactful and innovative legal solutions for businesses operating in Thailand and across the region.
At ILAWASIA, we are driven by our vision of being a leading force in the legal industry, and this recognition is a milestone in our journey toward shaping the future of legal practice in Thailand and beyond.
Source : https://www.legalbusinessonline.com/features/alb-asia-ma-rankings-2024
More details on our M&A service : https://ilawasia.com/service/#m-and-a
#ILAWASIA #MergersAndAcquisitions #LegalExcellence #ALBRankings2024 #LegalLeadership #ThailandLegal
貿易救済に関する国会委員会の設立についての政令 カンボジア
- 概要
2024年8月27日、カンボジア王国政府は、貿易救済に関する国家委員会を設置する政令第194ANKr/BK号を交付しました。この政令は、カンボジア国内または他国との貿易紛争を規制・解決するための重要な枠組みである貿易救済法の施行や促進を効果的に行うことを目的としている。
- 主な内容
- 委員会の構成
- 貿易救済に関する国家委員会の委員長は商務大臣が務め、国の貿易政策が政府の目標に沿うようにする。
- 常任副委員長は、商務省の長官が務め、委員会の継続的な運営に中心的な役割を果たす。
- その他の副委員長は、閣僚評議会の事務局および経済財務省の事務局が務める。
- 委員会は、工業省、法務省、カンボジア開発評議会、税関、租税総局、国内貿易総局など、さまざまな省庁および政府機関の代表者で構成される。これらの構成員により委員会の機能に多様な専門知識をもたらす。
- 役割と責任
- 実施と遵守：委員会は、貿易救済法およびその他の関連する国際協定を遵守する手続きを実施することを任務としている。これにより、カンボジアの貿易慣行がグローバルスタンダードに合致することを確実にする。
- 守秘義務と法的文書：委員会は、提出された苦情の守秘義務を定め、管轄裁判所に提出する公的文書を作成する。これにより、機密情報を保護するとともに、法的手続きが適切に行われるようにする。
- 法的見解と修正：委員会は、貿易救済法の施行に関する法的意見を検討し、提出する責任を負う。また、規制が適切かつ効果的であり続けるよう、その改正を提案する。
- 国際協力：委員会は、貿易救済の問題に関して、国際貿易関係や紛争解決を促進するため、他国と連携する。
- 助言と技術支援：委員会は、その役割を遂行するため、開発パートナー、技術顧問、または国内外の専門家に要請することができる。このような外部からの支援により、複雑な貿易問題に取り組む委員会の能力を高めることができる。
- 小委員会と作業部会：委員会は、その責務を効率的に遂行するため、特定の課題に焦点を当てた小委員会または作業部会を設置する権限を有する。
- ガバナンス
- 委員会は、少なくとも年2回は会議を開催しなければならず、必要に応じて臨時会議を開催する。この定期的な会議開催により、新たに発生する貿易問題への継続的な監視と対応が強化される。
- 会議は常任副議長が議長を務め、全ての委員の出席が義務付けられる。
- 商務省の情報・法的通知部局が委員会の事務局を務め、管理および運営上の支援を行う。
- 予算と財務
委員会の運営は国家予算で賄われ、罰金やその他のサービスの再入で賄われている。この財務構造により、委員会は任務を遂行するために必要な財源を確保している。
- 結論
貿易救済措置に関する国家委員会の設立は、カンボジアの国際貿易紛争を規制し、貿易慣行を国際基準に合わせるための取り組みにおいて、重要な一歩を踏み出したことを意味します。体制を整備し、十分な資金が確保された委員会を設立することで、カンボジア政府は貿易救済措置の効果的な実施に向けた基盤を築きました。これにより、最終的により公平で競争力のある貿易環境の実現に貢献することになります。
著者
Vicheka Lay, Partner
Makara Um, Associate
Contact Detail : info@ilawasia.com
MLMUPC of Cambodia launched a trail of New Digital Public Services
In Brief
On 5 September 2024, the Ministry of Land Management, Urban Planning, and Construction (MLMUPC) officially launched its new suite of digital public services, including Vente Definitive, Donation Definitive, Hypothec Services, and Mortgage Services.
This development marks a significant milestone in MLMUPC’s ongoing digital transformation, aligning with the Royal Government’s Pentagon Strategy for Economic Development and Digitalization. The initiative is designed to enhance the efficiency of public service delivery, facilitating quicker and more accessible land registration processes for the public. It also reflects the government’s commitment to fostering a satisfactory and harmonious environment in line with current socioeconomic and cultural development goals.
In addition, MLMUPC will pilot these digital services in Phnom Penh through its dedicated website: https://cadastral.mlmupc.gov.kh/login, further advancing its mission to streamline public access to land management services.
Procedure
The procedural flow of services is as below:
Step 1: Click on MLMUPC’s Links: https://cadastral.mlmupc.gov.kh/login
Step 2: Applicant shall create account within the requirements.
Step 3: There are 5 options that available for applicant to request such as:
- Vente and Donation Definitive Services,
- Hypothec and Mortgage Services,
- Documents Tracking Via QR Code,
- Documents Saved and Requested and
- Declaration of Adjudication Areas
Step 4: Select the services to be requested, fill in the service request form and provide supporting documents as require, then submit the applications.
Step 5: If the application is accepted, the applicant will receive a notice to pick up their final documents and pay the service fees at the Phnom Penh Department of Land Management, Urban Planning, Construction and Cadaster.
Conclusion
In conclusion, the launch of MLMUPC’s new digital public service represents a pivotal step towards modernizing Cambodia’s land management system. By embracing digitalization, the Ministry is not only improving the efficiency and accessibility of crucial services, but also reinforcing the Royal Government’s commitment to economic development as outlined in the Pentagon Strategy. As these services are piloted in Phnom Penh, the initiative promises to pave the way for a more streamlined and user-friendly approach to land registration, reflecting Cambodia’s continued progress toward digital transformation and sustainable socioeconomic growth.
Authors
Vicheka Lay, Partner
Tanadee Pantumkomon, Partner
Makara Um, Associate
Hort Lypheng Legal Clerk
Contact Detail: info@ilawasia.com
Continued Legal Education
ILAWASIA is pleased to announce that attorney Vicheka Lay, partner of ILAW Cambodia Law Office, has been granted with a Certificate of Professional Lawyer Training, issued by the Bar Association of the Kingdom of Cambodia. The grant of this certificate is the result from his completion of the 13th Professional Lawyer Training from 14th October 2022 to 11th February 2023 and has fulfilled all the requirements of the Legal Profession Training Centre and is qualified for the Certificate of the 13th Professional Lawyer Training for a total of 180hours.
Cambodia : Sub-Decree on the National Committee on Trade Remedy
Overview:
On August 27, 2024, the Royal Government of Cambodia issued Sub-Decree No. 194 ANKr.BK, establishing the National Committee on Trade Remedy. This sub-decree aims to effectively enforce and promote the implementation of the Law on Trade Remedy, which is a critical framework for regulating and resolving trade disputes within Cambodia and with other countries.
Key Provisions:
1. Committee Composition:
– The National Committee on Trade Remedy is chaired by the Minister of Commerce, ensuring that the country’s trade policies align with governmental objectives.
– The permanent vice-chair is a Secretary of State from the Ministry of Commerce, who plays a pivotal role in the ongoing operations of the committee.
– Additional vice-chairs include a Secretary of State from the Office of the Council of Ministers and one from the Ministry of Economy and Finance.
– The committee comprises representatives from various ministries and governmental bodies, including the Ministry of Industry, Ministry of Justice, Council for the Development of Cambodia, Customs and Excise, General Department of Taxation, and the General Directorate of Internal Trade. These members collectively bring diverse expertise to the committee’s functions.
2. Roles and Responsibilities:
– Implementation and Compliance: The committee is tasked with implementing procedures that adhere to the Law on Trade Remedy and other relevant international agreements. This ensures that Cambodia’s trade practices are consistent with global standards.
– Confidentiality and Legal Documentation: The committee establishes confidentiality protocols for complaints submitted to it and prepares official documentation for submission to competent courts. This process safeguards sensitive information while ensuring that legal processes are properly followed.
– Legal Opinions and Amendments: The committee is responsible for reviewing and providing legal opinions related to the Law on Trade Remedy’s implementation. It also proposes amendments to existing regulations to ensure they remain relevant and effective.
– International Cooperation: The committee collaborates with other countries on trade remedy issues, facilitating international trade relations and dispute resolution.
– Advisory and Technical Support: The committee can invite development partners, technical advisors, or local and international experts to assist in fulfilling its roles. This external support enhances the committee’s ability to address complex trade issues.
– Sub-Committees and Working Groups: To efficiently carry out its responsibilities, the committee has the authority to establish sub-committees or specific working groups focused on particular tasks.
3. Governance:
– The committee is required to convene at least two meetings per year, with additional extraordinary meetings scheduled as necessary. This regular convening ensures ongoing oversight and responsiveness to emerging trade issues.
– The meetings are chaired by the permanent vice-chair, with mandatory attendance from all committee members.
– The Information and Legal Notification Department of the Ministry of Commerce serves as the secretariat to the committee, providing administrative and logistical support.
4. Budget and Funding: The committee’s operations are funded by the national budget, supplemented by revenues from penalties and other services. This financial structure ensures the committee has the resources needed to fulfill its mandate.
Conclusion:
The formation of the National Committee on Trade Remedy marks a significant step in Cambodia’s efforts to regulate international trade disputes and align its trade practices with international standards. By establishing a structured and well-resourced committee, the Cambodian government has laid the groundwork for effective enforcement of trade remedies, which will ultimately contribute to a fairer and more competitive trading environment.
AUTHORS
Vicheka Lay, Partner
Makara Um, Associate
Contact Detail : info@ilawasia.com
ILAWASIA ranked in the 2024 Asia IP Patent Rankings
ILAWASIA is proud to announce that we have been ranked Tier 2 in Patent Contentious in the 2024 Asia IP Patent Rankings. This prestigious recognition is a testament to our team’s expertise and unwavering dedication to delivering top-tier legal services in the field of intellectual property. We are deeply honored by this acknowledgment, as it reflects our consistent efforts to protect and defend the rights of our clients in complex patent disputes.
Our success in this area underscores our commitment to excellence and our ability to navigate the intricacies of patent law, providing our clients with strategic and effective solutions. We remain dedicated to continuing our work in intellectual property and striving for even greater achievements in the years to come.
Recognition and Enforcement of Foreign Arbitration Awards in Thailand
Recognition and Enforcement of Foreign Arbitration Awards in Thailand
OVERVIEW
Thailand does not currently have an international agreement that recognizes judgments rendered by foreign courts. As a result, the party claiming damages is unable to enforce the judgment against the debtor’s assets in Thailand, even if they win the case and receive the foreign court judgment. The creditor will be required to file a new lawsuit in the Thai court in which the foreign court judgment will be only recognized as a piece of evidence. One potential resolution to the aforementioned restrictions is to consent to the resolution of disputes that arise under the contract through arbitration. The benefit is that the creditor of a foreign arbitral award has the right to enforce the award against an opponent in Thailand. According to The Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958, commonly known as the “New York Convention”, to which Thailand is a signatory, along with over 100 other countries.
The procedure for enforcing foreign arbitral awards is governed by the conditions outlined in Arbitration Act B.E. 2545 (2002). The party seeking enforcement of the arbitral award must submit an application with the competent court within three years from the date that the award is enforceable. After receipt of the application, the court shall promptly review the case and issue a judgment accordingly.
The applicant for enforcement of the award must produce the following documents to the court:
(1) Original or certified copy of the arbitral award;
(2) Original or certified copy of the arbitration agreement;
(3) Thai translation of the award and of the arbitration agreement by the translator who has taken an oath or who affirmed before the court or in the presence of an official or an authorized person, or certified by an official authorized to certify translations or by a Thai envoy or consul in the country where the award or the arbitration agreement was made.
COURT FEE
In the case of a request for the enforcement of an arbitral award and a request for annulment of the award, the fees are as follows:
- For amount of money not exceeding fifteen million Baht: 1% of the amount of capital, but not exceeding one hundred thousand Baht.
- For the portion exceeding fifty million Baht: 1% of the amount exceeding fifty million Baht.
ESTIMATED TIME OF PROCEDURE
Upon the acceptance of the filing, the opposing party will receive a copy of the application along with relevant documents from the court’s officer. The opposing party then has the right to submit an objection with supporting documentation to the court. Subsequently, the witness examination session will be conducted. The Court of First Instance will then make a decision on whether or not to enforce the award, which typically takes between one and two years.
REASONS FOR REFUSING TO ENFORCE THE AWARD AND THE COURT’S CONSIDERATION
Generally, the court will not render a decision on the facts of the case, as the arbitrator has already heard evidence, made a decision, and rendered a final award.
However, the arbitral award may be refused enforcement by the court under the conditions as specified in Arbitration Act B.E. 2545 (2002), regardless of the country in which it was rendered, if the opposing person proves that:
(1) A party to the arbitration agreement was under some incapacity under the law applicable to that party;
(2) The arbitration agreement is not binding under the law of the country agreed to by the parties, or failing any indication thereon, under Thai law;
(3) The party making the application was not given proper advance notice of the appointment of the arbitral tribunal or of the arbitral proceedings or was otherwise unable to defend the case in the arbitral proceedings;
(4) The award deals with a disputed not falling within the scope of the arbitration agreement or contains a decision on matter beyond the scope of the arbitration agreement. However, if the award on the matter which is beyond the scope thereof can be separated from the part that is within the scope of arbitration agreement, the court may set aside only the part that is beyond the scope of arbitration agreement or clause;
(5) The composition of the arbitral tribunal or the arbitral proceedings was not in accordance with the agreement of the parties or, if not otherwise agreed by the parties, in accordance with this Act;
(6) The arbitral award has not yet become binding, or has been set aside or suspended by a competent court or under the law of the country where it was made. Save where the setting aside or suspension of the award is being sought from the competent court, the court may adjourn the hearing of this case as the court deems appropriate; and if requested by the party submitting the application, the court may order the party against whom enforcement is sought to provide appropriate security;
(7) The award involves a dispute not capable of settlement by arbitration under the law;
(8) The enforcement would be contrary to public policy.
The enforcement of a foreign arbitral award in Thailand requires the recognition of the award by Thai courts, which guarantees the smooth execution of the enforcement process. Proper recognition and enforcement of arbitral awards contribute to the development of confidence in the international arbitration system and the facilitation of more equitable and efficient international dispute resolution.
ADDITIONAL INFORMATION
Please note that the Supreme Court of Thailand recently had a decision in the Supreme Court Case No. 8539/2560 that a Thai court is solely authorized to set aside domestic awards. Thai courts are not authorized to consider and issue orders to set aside a foreign award.
ABOUT ILAWASIA
We, ILAW ASIA CO., LTD., have over 17 years of expertise in litigation, arbitration, and the recognition and enforcement of both domestic and foreign arbitration awards in Thailand, Myanmar, Cambodia, and Laos. With our extensive experience, we are well-equipped to assist your business in achieving its goals while minimizing legal risks. We are committed to helping you succeed.
AUTHORS
Somphob Rodboon, Managing Partner
Tanadee Pantumkomon, Partner
Kridtaporn Sirisereephap, Senior Associate
Rattasart Taweekarn, Associate
Surayuth Jantawong, Associate
Contact Detail: Litigation@ilawasia.com
Telephone Number +66 2 048 2534 ext. 313
Creation of Special Tax Audit Unit under the Supervision of the General Department of Taxation
LEGAL SUMMARY
SUBJECT Creation of Special Tax Audit Unit under the Supervision of the General Department of Taxation
REGULATION AND OBJECTIVES OF SPECIAL TAX AUDIT UNIT
On July 16, 2024, the Cambodian Prime Minister signed into law Sub-Decree No. 160 ANKr.BK, establishing a special tax audit unit under the supervision of the General Department of Taxation (GDT) within the Ministry of Economy and Finance. This strategic move aims to address and expedite the resolution of various taxpayer challenges related to tax audits.
The creation of this specialized unit is expected to enhance the business and investment environment in Cambodia by streamlining the tax audit process and providing more efficient support to taxpayers. By addressing audit-related issues more promptly, the government hopes to foster a more transparent and predictable tax landscape, thereby boosting investor confidence and encouraging economic growth.
FUNCTION AND AUTHORITIES
The unit’s core responsibilities include managing and conducting tax audit operations in strict compliance with the applicable tax regulations, and adhering to the established guidebook on tax audit formalities and procedures for both tax officers and taxpayers under its jurisdiction, including conducting risk assessments and analyses to ensure that comprehensive audits are efficiently conducted only once per taxpayer. The unit is also responsible for preparing an annual tax audit plan and issuing notifications to enterprises that are subject to special tax audits.
Furthermore, the special unit is empowered to request the Director General of the GDT to review and resolve any outstanding issues that have not yet been settled by the GDT.
JURISDICTION
The unit’s jurisdiction will cover enterprises that have been awarded the gold tax compliance certificate, as well as other enterprises identified by a committee to be established by the GDT under the Ministry of Economy and Finance.
AUTHORS
Vicheka Lay, Partner
Tanadee Pantumkomon, Partner
Makara Um, Associate
Contact Detail: info@ilawasia.com
Commercial Advertisement of Alcoholic Products
IN BRIEF
On 23rd July 2024, the Ministry of Information issued the Prakas No. 084 PrK.Info, in order to determine the forms, procedures, and measures to govern the commercial advertisement of alcoholic products. Additionally, this Prakas also aims to guarantee social order, public welfare, reducing impacts on the economy, culture, tradition, as well as to promote fair competition.
This Prakas only covers commercial advertisement on alcoholic products with ethanol degree more than 3 percent of the quantity.
KEY PROVISIONS
Content Restriction: Anyone seeking to proceed with such commercial advertisement, they are required to obtain permission from the working group that governs commercial advertisement of alcoholic products.
Article 3 of the Prakas mentions the forms of commercial advertisement of alcoholic products that are unauthorized.
These non-authorizations include
- Any advertisement that attaches with untruthful description;
- Advertisement that intends to attract people to consume the alcoholic products, promote sexual capacities or other sexual attraction;
- Advertisement or propaganda on the event’s stage;
- Advertisement that targets under-aged people.
Location Limitation: It is banned all kinds and forms of advertisement that is less than 200 meters from educational institutions, health centers, religious institutions, historical-cultural resorts and international airport.
Target Limitation: The Prakas further bans advertisement via all kinds of television and radio between 18:00 to 20:00 pm. Pornographic and violent messages, advertisement targeting pregnant women and women that feeding children are all banned. Religious and cultural people, patients and pregnant women have to be respected by the advertisers.
Specific Authority: Application for permission to proceed with commercial advertising of alcoholic products could be submitted to the one-stop service mechanism of municipal-provincial administration (city, district, khan) after the request is approved by the working group governing the commercial advertisement of alcoholic products.
ENFORCEMENT AND PENALTIES
The Prakas gives three months to the individuals, businessperson, legal entities to apply for permission from the working group governing the commercial advertisement of alcoholic products. Penalties will apply for those that conduct the advertisement without permission.
AUTHORS
Vicheka Lay, Partner
Makara Um, Associate
Contact Detail: info@ilawasia.com
