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New Tax Treaties Under Negotiation

23 May 2012

The Thai Revenue Department (TRD) revealed that in March, the parliament approved bilateral tax treaties between Thailand and 9 countries including Brunei, Estonia, Ireland, Kenya, Lithuania, Morocco, Papua New Guinea, Tajikistan and Zimbabwe. In addition, the double tax agreement between Thailand and the Philippines will be revised having been effective since 1983. Taxand Thailand examines the new tax treaties and what businesses in Thailand need to consider in light of the announcement.

Existing tax treaties
At present, Thailand has its tax treaties with 55 countries and the latest 2 countries are Russia and Myanmar which were effective as from 1 January 2010 and 1 January 2012 respectively. The TRD views that the additional tax treaties network will benefit Thailand from collaboration within the network in order to prevent tax avoidance. The TRD prefers to negotiate tax treaties with AEC members first and the only non contracting state with Thailand is Cambodia for double tax agreements.

Free trade agreements
Thailand has entered into 4 bilateral FTAs with Australia, New Zealand and Japan including India for 82 items. In addition, as a member of ASEAN Free Trade Agreement (AFTA) Thailand is involved in the effective multilateral FTAs with China, Japan, Korea, India, Australia and New Zealand. The FTAs will reduce the trade barriers for both trade of goods and services including reducing and removing the import duty and the relaxation of foreign ownership limitation.

ASEAN Economic Community
For AEC, the Thai cabinet approved the set up of the ASEAN Economic Community Coordinating Agency (AECCA) under the supervision of the Department of Trade Negotiation, Ministry of Commerce in 2011. The AECCA will follow up the process of implementation pursuant to AEC Blueprint prior to full implementation of AEC in 2015.

Taxand's Take

Treaty networks entered into will assist the investors to make decisions for its foreign direct investment and cross-border transactions with respect to Thailand. However, bilateral and multilateral FTAs between other countries should be considered in order to achieve maximised profits for investors in the trade of goods and services.

Your Taxand contact for further queries is:
Chinapat Visuttipat
T. +66 2632 1800


Taxand's Take Author