Tax & Accounting

Thailand’s New Personal Income Tax Structure Comes Into Effect

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By Dezan Shira & Associates
Editor: Alexander Chipman Koty

Thailand’s updated personal income tax (PIT) structure officially came into effect on January 1, 2017, with the aim to ease tax burdens and boost disposable income. The revision, Revenue Code Amendment Act (No 44) BE 2560, was gazetted on January 27, officially instituting the changes. The new rates apply for all income collected as of January 1 for filing in 2018. The revised income tax scheme was initially approved by the Thai Royal Cabinet on April 19, 2016.

The new structure revises the income tax bands subject to 30 percent and 35 percent tax, and increases deductibles, and doubles allowances. The lower income tax bands and their respective rates remain unchanged. The revision also raises the minimum thresholds for mandatory tax filing.

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Philippines’ Finance Secretary Recommends 7 Percent Corporate Income Tax Cut

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By: Dezan Shira & Associates

The Philippines’ Finance Secretary, Carlo Dominguez, has recommended a corporate income tax rate of 25 percent, reduced from the current 32 percent.

The proposal would be implemented as part of the Government’s Comprehensive Tax Reform Program (CTRP). Dominguez made the announcement at the 5th Manila Times Business Forum in Davao last Friday. 

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Evaluating Cambodia’s Tax Reform

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By Dezan Shira & Associates
Editor: Alexander Chipman Koty

Cambodia’s updated Law on Financial Management for 2017 reflects the government’s ongoing efforts to revamp the country’s tax system and bring more businesses operating in the informal sector into the formal tax regime by offering incentives for small taxpayers. The amended laws, which came into effect on January 1, offer lower tax rates for small and medium sized enterprises and tax exemptions for firms that uphold quality accounting. The new rules continue a tax reform initiative that began in 2013 to increase the government’s tax revenue collection capabilities and better regulate Cambodia’s significant informal economy. Successful implementation will better equip foreign investors to compete with domestic firms in the informal sector that are able to offer lower rates for their services by avoiding tax obligations.

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Understanding Taxation of 13th Month Pay and Christmas Bonuses in the Philippines

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By Dezan Shira & Associates
Editor: Harry Handley

Philippine pesosWith the Christmas season and year-end fast approaching, annual issues surrounding 13th month pay and Christmas bonuses in the Philippines raise their head once again. One key topic that often prompts questions is the distinction between 13th month pay and Christmas bonuses, also known as a year-end bonuses, and the tax rules surrounding them. Though the two systems of bonus payments are distinct, they can interact to create diverse tax outcomes. Effectively optimizing bonus structures not only reduces employers’ overall tax burden, but also fosters an environment in which employees are rewarded for their labor and given incentives for strong productivity.

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Malaysia Airport Tax Hikes Scheduled for 2017

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By: Dezan Shira & Associates

Malaysia is set to implement a series of tax increases for both domestic and international bound flights starting in 2017. Although undergoing finalization, it has been confirmed that all tax increases have been approved by Malaysia’s legislature. With rates confirmed, criticism and outcry from the nation’s aviation industry has been growing as many worry about the ramifications for domestic carriers as well as Malaysia’s position as a regional aviation hub. 

Professional Service_CB icons_2015RELATED: Tax Compliance Services from Dezan Shira & Associates
New Aviation Rates

Set to be implemented from January 1st, 2017, the following flat rates will be applied to individual tickets dependent upon their destination. 

  • RM11 (US$2.66) for domestic flights
  • RM35 (US$8.47) for flights to ASEAN countries
  • RM73 (US$17.66) for international flights

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Philippine Tax Amnesty Proposed in a Bid to Increase Revenue Collection

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By: Dezan Shira & Associates

A Philippine tax amnesty program has been proposed by senate minority leader Ralph Recto in an effort to increase state collections and mitigate reduced revenues that are projected to come in the wake of planned corporate tax reductions. Announced formally on the 20th of September, changes will now be considered by the national assembly prior to their implementation. If passed, the amnesty will take effect 15 days from this date and be available for six months from this date.

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Indirect Taxation Across ASEAN

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By: Dezan Shira & Associates

Among a myriad of factors which determine competitiveness within ASEAN member states, rates of taxation are a particularly salient judge of character for the treatment of foreign investment. In recent years, corporate income tax (CIT) has become the standard bearer for tax benchmarking, however, foreign investors will be faced with a variety of different taxes in the event that capital is committed. For those importing and exporting, indirect taxation, including value added taxation (VAT) and goods and services tax (GST) are significant forms of tax that should not be disregarded. 

In essence, an indirect tax adds to the price of a purchasable product or a payable service, thereby increasing the cost of that product or service and causing consumers to indirectly pay its rate of taxation. Indirect taxes thus differ from other forms of taxation, such as corporate income and individual income tax; both of which require a business or an individual to pay the applicable amount directly to a government.

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The Philippines Resumes Tax Audits Following Internal Review

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By: Dezan Shira & Associates

The Philippines has announced the implementation of Circular 91-2016 resuming field audits and other field operations of the Bureau of Internal Revenue (BIR). With effect from September 1st, the circular overrules a previous suspension of BIR field capabilities issued on July 1st under Revenue Memorandum Circular (RMC) No. 70-2016.

Understanding the Previous Suspension

The suspension has been touted as a means of fine tuning the BIRs capabilities and increasing government revenue. Outlined under RMC No. 70-2016 the suspension has by all accounts been used to address lengthy processing times for audits and investigations, as well as a chance to investigate claims that authorities within the BIR were abusing their positions for financial gain. While suspension of audits and investigations were rolled out as part of this internal review, administration officials have constantly maintained that they have not been canceled outright.

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Singapore Removes Spot Pricing Requirements for Precious Metal GST Exemptions

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By: Dezan Shira & Associates

The Monetary Authority of Singapore (MAS) has removed spot pricing requirements for Investment Precious Metals (IPMs) seeking GST exemptions. IPMs generally include bars, ingots, wafers, and other highly valued precious metals that can be traded on the international bullion market and are used as a form of investment. Outlined under Circular No:09/2016, issued on August 25th, the changes have taken effect as of September 1st.   

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Malaysia Announces 70% Tax Exemption for Shipping Industry

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By: Dezan Shira & Associates

Malaysia’s Ministry of International Trade and Industry revealed tax incentives on August 9th targeting the shipping industry. Incentives will be applied with immediate effect and will be available for periods of five years.

Understanding Incentives

Shipbuilding incentives will be applied to both shipbuilding companies as well as those involved in supporting industries such as ship repair. In terms of their structure, incentives target both existing and prospective investors. Those involved or considering investment in the aforementioned industries should make note of the following incentive particulars:

  • First time investors will be eligible for pioneer status in Malaysia for a period of five years. Under this status, investors may exempt up to 70 percent of their statutory income from corporate income taxation.
  • Existing and first time investors will be allowed to deduct 60 percent of all capital expenditure for a period of five years. It should be noted, however, that first time investors will be required to choose between capex deductions and pioneer deductions.
  • Applying for incentives: All applications will be evaluated on an individual basis by the Malaysian Investment Development Authority.  

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