The Revenue Department is studying whether to scrap the tax on the repatriation of profits made by Thai holding companies from their foreign investments in tax-haven countries so long as the money is invested in businesses or operations in Thailand to be determined by the government.
Encouraging Thai holding companies to invest their foreign profits locally would help to boost the economy, says Mr Sutthichai. PAWAT LAOPAISARNTAKSIN
The exemption is aimed at encouraging local holding companies with investments abroad to repatriate profits in order to help boost Thailand's economy, director-general Sutthichai Sangkamanee told a seminar yesterday.
He said even though the Revenue Department would lose some revenue, it could be offset by indirect tax from investment of the repatriated profit. Thai holding companies now prefer to keep their profits from foreign income sources, as repatriation is subject to tax. Such a change would require legal amendments.
As for corporate income tax, the department wants commercial banks to disclose their corporate customers' financial data to the department for tax review, he said.
Mr Sutthichai said laws may be amended to enforce such disclosures in the future if the banks do not cooperate.
The US Foreign Account Tax Compliance Act requires foreign financial institutions to report to the Internal Revenue Service information about financial accounts held by US taxpayers or by foreign entities in which US taxpayers hold a substantial ownership interest.
After the corporate income tax was cut to 20% from 30%, the department tightened its audit to prevent smaller companies from tax avoidance.
The department is also considering higher personal income tax deductions by using tax invoices for refunds. This could encourage people to ask operators for tax invoices when purchasing goods, making it harder for the operators to understate their revenue.
Individual taxpayers can now deduct 40% of annual taxable income up to 60,000 baht. Any new personal income tax structure would take effect for the 2013 tax year ending this December, he said. If parliament fails to pass a new law this year, the Finance Ministry could enforce it through an executive decree.
Under the new personal income tax structure, the lowest bracket will be 5% for those earning 150,001 to 300,000 baht, while the top bracket for those earning above 4 million will dip to 35% from 37%.