BANGKOK: Thailand will introduce the OECD’s Global Minimum Tax of 15% for multinational corporations from Jan 1 next year.
Multinationals with annual revenues of at least 750 million euros will be required to pay a minimum corporate income tax rate of 15%, in a move aimed to prevent tax competition to attract investment and stop multinationals avoiding tax.
Other companies will continue to pay the standard rate of 20%.
Sanan Angubolkul, chairman of the Thai Chamber of Commerce, said his organisation supports the idea of cutting corporate tax to levels closer to those of competitor nations, aligning with the OECD initiative already adopted globally.
Lower tax rates for domestic businesses would enable them to cut costs and hire more workers, he noted.
The new clarity on corporate tax would also boost confidence among both Thai and foreign investors, contributing significantly to Thailand's economic recovery.
“Revenue lost from the tax reduction would be offset by increased investments,” Sanan said.
Kriengkrai Thiennukul, chair of the Federation of Thai Industries (FTI), said adopting the Global Minimum Tax aligns with Board of Investment (BOI) policies to attract investment and position Thailand as a regional business hub.
Kriengkrai said the move could attract major corporations with regional offices currently based in Singapore to relocate to Thailand, where the cost of living is significantly lower.
While Singapore offers comprehensive infrastructure, a financial hub, and multinational regional offices, it also boasts favourable personal income tax rates of 17%, lower than many of its competitors.
“Singapore thrives with its 17% tax rate, which is competitive. Thailand could leverage its advantages, such as lower living costs, affordable rents, cheaper labour, and its appeal as a tourism destination to attract investors,” Kriengkrai said.
Investors working in Singapore often travel to Thailand for weekend getaways. By relocating their offices to Thailand, the country could gain substantial economic benefits, he said. - The Nation/ANN
