Global Tax Alert | 21 June 2018

Thailand amends tax incentives for International Headquarters regime

  • Share

On 19 June 2018, the Thai Cabinet approved the amended tax incentive criteria for the International Headquarters (IHQs) regime, seemingly in response to the Harmful Tax Practices – 2017 Progress Report on Preferential Regimes1 in which IHQs are regarded as a harmful tax practice. The amendment limits the types of royalty income derived by the IHQ from its overseas and Thai-associated enterprises that are eligible for tax incentives to only those resulting from technological research and development (R&D) activities performed in Thailand, irrespective of whether the R&D activities are performed by the IHQ or other parties engaged by the IHQ.

As there is no specific definition of qualified royalty income under the existing IHQ program, the proposed amendment, if enacted, will provide a clearer but limited definition of royalty income eligible for the incentive.

Details of other conditions and tax incentives would be unchanged by this amendment.

This amendment will become effective after completion of all legislative processes.


1. Inclusive Framework on Base Erosion and Profit Shifting: Action 5 (Countering Harmful Tax Practices More Effectively, Taking into Account Transparency and Substance).

For additional information with respect to this Alert, please contact the following:

EY Corporate Services Limited, Bangkok
  • Yupa Wichitkraisorn
  • Kasem Kiatsayrikul
  • Su San Leong
Ernst & Young LLP, Thailand Tax Desk, New York
  • Sarunya Sutiklang-Viharn
Ernst & Young LLP, Asia Pacific Business Group, New York
  • Chris Finnerty
  • Kaz Parsch
  • Bee-Khun Yap

EYG no. 010013-18Gbl