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ResourcesCorporate and Tax AdvisoryThailand Tax LawPossible Changes to Head Office and Branch Office Tax Reporting Rules

Possible Changes to Head Office and Branch Office Tax Reporting Rules

Transcript of the above video:

In this video, we're going to be discussing some possible changes to tax regulations with respect to corporate entities here in the Kingdom. In a recent articles that came out in the Bangkok Post, which is a favorite publication of mine generally, entitled "Proposed Changes to Incorporate Tax Filing Raise Questions." This was published 12th of June 2017 and I'm not going to quote directly from the article. I just want to sort of cite it as the inspiration for this video.

What's interesting about this article in my opinion is it basically cites the possibility that there may be a change to the way tax reporting is done here in Thailand with respect to companies. And what they're talking about here is especially with respect to a company’s branch office. Many companies based here in Thailand will have a headquarters, head office and then multiple branches or one branch is possible which is just two different offices.

As of the time of this filming, the current requirement with respect to tax filing is that the company as a whole file one tax return. Apparently, the powers that be are going over the possibility of requiring each branch to go ahead and file its own tax return and that is probably going to shake things up pretty significantly within the world of corporate services and accounting in Thailand because in certain companies, that could be a significant change and pose substantial cost and could result in the expense of significant resources from an administrative level. Like you could have a company with one, I can think of many retail companies with one head office and maybe hundreds of branch offices under that one corporate umbrella, for lack of a better term.

The requirement that each of those file a tax return could be somewhat cumbersome for certain types of entities. This is yet to be promulgated as a regulation so its remains to be seen whether or not this is actually going to happen. One of the main reasons for being proposed, the thinking behind the proposal is that it will provide more clarity with respect to a company's earnings, company's corporate activities things like this. It will provide more transparency so that the government can ascertain the tax liability of a corporate structure.

Again, it remains to be seen whether it will be implemented but it would seem to suggest that further changes to the tax code may be coming down the pipe and those changes to the tax code may, in fact, provide or create cumbersome impositions on various entities here in Thailand. Again, we can't be sure what those impositions are going to be but if this proposal was adopted as is, it could provide significantly cumbersome requirements on various types of companies here in Thailand and for that reason, and it’s of interest to those who are doing business here in the Kingdom.