Deputy Transport Minister Pailin Chuchottaworn said the incumbent government has the full authority to proceed with every project as scheduled, highlighting the five biggest ones planned for the economic zone.

Pailin said that these projects are for the U-Tapao airport and Aviation City developments, an aircraft maintenance, repair and overhaul centre, the third phase of Laem Chabang Port and the Map Ta Phut Port, and a high-speed railway.

State Railway of Thailand (SRT) acting governor Worawut Mala said that a Charoen Pokphand Group (CP Group)-led consortium, which offered the lowest bid for the Bt224-billion high-speed railway linking the three main airports – the Don Mueang and Suvarnabhumi airports serving Bangkok and the U-Tapao facility in Rayong – has agreed to withdraw some offers that are outside the terms of reference (TOR). It has not yet finalised the financial issues with its partners in China, Worawut said on the Spring 26 TV channel.

The negotiations with the government were postponed from yesterday to April 4.

“There are over 10 proposed changes to the original conditions in the TOR and the suspended issues mainly involve funding,” Worawut said.

“As this project is a joint investment project, funding must be well considered. Initially, CP Group had not been able to find low-cost funds. But now, it can find low-cost funds and has asked for time to negotiate with its partners.”

He also expressed confidence that the negotiations on April 4 will conclude successfully.

According to the Royal Thai Navy, three consortiums submitted bids on March 21 to develop U-Tapao airport and to work on the Eastern Airport City project.

An announcement on the qualified bidders will be delayed from this week, with the need to for detailed checks on the information provided by the bidders. The winning bid for this project is expected in April.

CP Group and its allies that formed a consortium include Thana Holding Joint Venture and, and aside from Thana Holding, are expected to include Orient Success International, Italian-Thai Development, Ch Karnchang and B Grimm Joint Venture Holding.

Another bidder, BBS Joint Venture, comprises Bangkok Airways, BTS Group Holding and Sino-Thai Engineering, while the third bidder, Grand Consortium, drew together Property Perfect, Asia Aviation and Christiani & Nielsen (Thai).

All bidders’ four envelopes will be taken into consideration. The first envelope will prove general qualifications with legal status, financial track record and technical qualifications. The second envelope will relate to technical proposals with a master plan review for the airport, the third passenger terminal design, a project plan and maintenance and operational plans, as well as proposed business plan.

The third envelope will offer price a proposal with financial models and the offers of a return to the state. The fourth envelope will involve additional offers, which will not be related to the assessment.

Section 71 Ter of the Revenue Code refers to two documents: 1 the report on relationship between companies and the value of related party transactions (referred to as ‘transfer pricing disclosure form’) to be submitted together with the annual corporate income tax return filing deadline, and 2 the documents or evidence showing information necessary for analysis of requirements of the related party transactions (referred to as ‘transfer pricing document’) to be submitted within 60 days after receiving the notice of request from the Thai Revenue Department (TRD).

The TRD is currently developing the transfer pricing disclosure form which is expected to be a short form to be completed and filed online. It is likely that the Bt200 million threshold should be assessed based on the amount of total revenue presented in the company’s statutory financial statements and also an entity may not be required to submit the transfer pricing disclosure form in a year when its total revenue is lower than Bt200 million. As you can expect, the purpose of the requirement for preparation and submission of the transfer pricing disclosure form is to provide the TRD with a summary of the entity’s related party transactions for an initial review and assessment of any risks that may arise from the transactions being concluded between the taxpayer and its related parties. With regard to the transfer pricing document, Section 71 Ter of the Revenue Code does not clearly mention the level of required information. Under BEPS Action 13, the OECD recommends a three-tiered approach to documentation that includes preparing a master file, a local file and country-by-country reports.

The master file contains standardised information relevant for the multinational enterprise group, while the local file provides additional details about the operations and transactions relevant to that jurisdiction and the economic analyses of the inter-company transactions.

Finally, the country-by-country reports (CbCR) contain summarised data by jurisdiction, including revenues, income, taxes, and indicators of economic activity. Based on the informal discussion with the tax officers, the transfer pricing document referred to under Section 71 Ter of the Revenue Code should cover the local file and the master files.

The master file should be prepared by the ultimate parent company whereby the local file is prepared by each entity which revenue falls within the threshold requirement. The CbCR which is also prepared by the ultimate parent company may be required under a separate law.

Apart from the purpose to prevent the shifting of profits through intercompany arrangements, the Transfer Pricing law aims to encourage taxpayers which have registered transactions with related parties to revisit their transfer price policies and the pricing being applied to such transactions so as to ensure that all related party transactions are conducted on an arm’s length basis.

Contributed by ABHISIT PINMANEEKUL, Partner, Transfer pricing service, KPMG Thailand

The board of the National Broadcasting and Telecommunications Communications (NBTC) yesterday approved a grant of over Bt18.8 million to the Department of Corrections to support its plan to develop a pilot project for telehealth services to prisoners in two prisons.

The service will be provided remotely via the broadband Internet network connection to the Khaobin Prison in Ratchaburi province and the Chiang Rai Central Prison.

The grant is from the NBTC’s Broadcasting and Telecommunications Research and Development Fund, NBTC deputy secretary-general Korkij Danchaivichit said yesterday.

The project development and the telehealth service under the NBTC budget will cover 24 months. The move is aimed at improving the living quality of prisoners by allowing them access to telehealth service.

The telecom watchdog has already signed a collaboration agreement with the Health Ministry for a pilot project to provide telehealth services under the NBTC’s project to provide roadband Internet service to 3,920 villages in remote areas nationwide. Both the broadband Internet service for these villages and the telehealth service will commence in May this year.

In the first phase, eight provinces will join the initiative – Chiang Rai, Phetchabun, Kamphaeng phet, Kanchanaburi, Kalasin, Surin, Surat Thani and Songkhla.

The research was conducted by Digital Vortex, a book published by Digital Business Transformation (DBT) Centre, co-founded by US-based technology firm Cisco and Swiss business school IMD.

According to the publication, a vortex naturally pulls everything into its centre at great speed, resulting in chaos and, subsequently, recombination of businesses and industries.

Raz Mohamad, chief financial officer (CFO) of Cisco Asean, said intelligent business platforms, data and predictive analytics, artificial intelligence, and machine learning tools are among those currently used by enterprises to transform their organisations to survive the tech challenge.

Mohamad, who recently held a CFO roundtable discussion in Bangkok on the topic of financial implications of digital transformation, said cross-business collaboration is now a crucial factor for enterprises to stay relevant.

Banks, for example, can learn from adjacent markets such as e-commerce platforms to better serve their customers while real estate and other businesses can learn from many tech start-ups.

He cited the automobile insurance industry as another example which will face its existential threat due to the advent of autonomous cars and connected vehicles, resulting in less road accidents, especially those caused by human factors.

Vatsun Thirapatarapong, managing director of Cisco System Thailand, said enterprises need to adopt digital and other new technologies to grow new business with agility.

While many new ventures may not be successful, enterprises should fail quickly, move on and turn around, according to Mahamad.

Regarding CFOs, their role and skill sets are shifting due to digital disruption so they need to have additional skills, including those of programmer, statistician, data analyst, and machine learning expert.

According to the Digital Vortex book, 41 per cent of top executives surveyed see disruption as an existential threat, while only 25 per cent of companies are actively responding to the disruption despite the serious concern expressed by those who see disruption as the biggest threat.

In other words, the majority of company executives are still adopting a wait-and-see attitude due to a number of factors.

Based on the publication, financial services, tech products and services, media and entertainment, telecom, and retail are the top-five industries that will face the most disruption over the next five years as they are at the centre of vortex.

Amazon is a good example of this phenomenon in which the lines between industries and businesses have dissolved and then recombined over the past few years.

So far, Amazon, which started out as a retail e-commerce site in 1994, has moved to disrupt many businesses and industries from media and entertainment to the consumer goods industry, among others.

Grab and Uber are among the other examples which have disrupted and recombined businesses and industries, with better values on cost, experience and platform, the last of which is the key driving force of most disruptive companies.

In other words, disruption requires businesses to make money in new ways. Existing enterprises can also disrupt themselves or they can be displaced by a new business model.

This does not mean abandoning the businesses that have made them successful but they need to challenge the assumptions that previously supported their businesses and stress-test the ways in which they deliver value to customers.

Consequentially, this requires organisational, operational, cultural, revenue model and other fundamental changes on a perpetual basis.

Most importantly, the power of platforms is predominant in the digital age.

China’s Tencent is a good example in which the holding company started off with its Wechat platform for free services on mobile devices, including video calls, mobile finance and loans, social networking, among others.

The so-called freemium model drives steady user volume growth while monetisation improves with exponential revenue and profit growth.

In this context, Cisco supports the digital transformation process with agility, which means hyperawareness, informed decision-making, and fast execution.

Nichapa Yoswee, TCEB’s senior vice president – business, said the bureau is set to deepen partnerships with existing alliances and find new partners at the three global leading trade shows namely IMEX Frankfurt in May, IMEX America in September, and IBTM World, Spain in November this year.

At the IMEX Frankfurt, the TCEB would form a partnership with Asian Association of Conventions and Visitors Bureau (AACVB) members to develop an economic impact assessment model of the MICE industry. The objective is to provide the members a single platform to calculate the industry’s impact on economic growth.

Moreover, the model would enhance confidence and awareness of the governments, policymakers, business organisations, as well as academic institutes.

Meanwhile, the TCEB has created PCO Partnership project (Professional convention Organisers) bringing international PCOs who are members of the International Congress and Convention Association (ICCA), to match the local PCOs supported by Thailand Incentive and Convention Association (TICA).

In addition, the bureau is looking for partnerships with international PCOs related to 10 key industries based on Thailand 4.0, bringing the business events to be held in Thailand.

The TCEB and its strategic partner TICA are elevating the service standards through the value chain of business events industry covering every touchpoint.

For air transport service, the TCEB has formed a partnership with Thai International Airways to offer Asean MaxiMICE package for travellers in Indonesia, Malaysia, Philippines and Singapore. While, the bureau has formed a partnership with Bangkok Airways to offer Fly and Meet Double Bonus for the CLMV market (Cambodia, Lao, Myanmar and Vietnam).

Since last year, the TCEB has launched a new branding, “Thailand Redefine Your Business Events”, reflecting its role as a thought leader. TCEB would act as a co-creator, partner and collaborator for the business events industry.

Adul Chotinisakorn, director-general of the department, said that of the two-month total, border exports declined 1.94 per cent to Bt121.27 billion while border imports rose 4.69 per cent to Bt98.21 billion, resulting in a surplus of Bt23.06 billion.

Thailand’s border trade with its four neighbouring countries dropped 1.65 per cent to a total of Bt178.88 billion with exports making up Bt101.33 billion, down 3.63 per cent while imports rose 1.06 per cent to Bt77.55 billion.

Malaysia was Thailand’s largest border trade partner, posting a total of Bt88.67 billion, followed by Laos (Bt31.74 billion), Myanmar (Bt31.18 billion), and Cambodia (Bt27.28 billion).

Transit trade with southern China, Vietnam and Singapore increased 14.06 per cent to Bt40.61 billion with exports rising 7.67 per cent to Bt19.95 billion and imports surging 21 per cent to Bt20.66 billion.

Thailand’s transit trade to southern China fetched the highest value at Bt16.81 billion with the highest growth of 55.99 per cent, followed by Vietnam at Bt12.86 billion and Singapore Bt10.94 billion.

The department expected all cross-border trade to expand further, supported by Thailand’s neighbouring countries’ measures to facilitate trade and reduce trade obstacles, the department’s Young Entrepreneur Network Development Programme, and its planned cross-border trade exhibitions in Narathiwat in late April and Tak in early June.

Malaysia’s business centre, IMT-GT Plaza, is currently under construction at Bukit Bunga, close to the Thailand-Malaysia border. The project is scheduled for completion in July this year.

Meanwhile, Cambodia has set up a joint committee for Thailand-Cambodia cross border trade to promote and facilitate both countries’ products and transpportation.

Myanmar has opened the second Thailand-Myanmar friendship bridge to facilitate product transport, travel and tourism with the East-West Economic Corridor on March 19.

This is  the expansion of Hong Kong’s multilifestyle product brand, Design Gallery Studio (DG Studio), to Thailand.

The establishment of the Hong Kong Economic and Trade Office (HKETO) in February 2019 marked an important milestone between Thailand and Hong Kong economic relations. Based on the remark of Thai Deputy Prime Minister Somkid Jatusripitak, the office has opened a wide array of opportunities. For “Thailand Investment Year 2019”, the Board of Investment reported Hong Kong’s recognition of Thailand as a primary investment hub in the CLMVT and Asean regions while Hong Kong will be the gateway to the Greater Bay Area (GBA).

In 2018, a total of 44 projects worth Bt20.3 billion originated from Hong Kong investors, up from 41 projects worth Bt7.15 billion in 2017.

 Working hand in hand with HKETO, Hong Kong Trade Development Council (HKTDC) is an important organisation dedicated to promoting two-way trade between the two regions which benefited numerous Thai and Hong Kong companies , particularly small and medium-sized enterprises (SMEs).

Sunny Chau, HKTDC ‘s Director of Thailand and South Asia, said, “Since the establishment of our regional headquarters in Bangkok, HKTDC has brought more than 8,000 Thai businesspeople to Hong Kong every year, reflecting our motto ‘Your Business, Our Mission’.

An example of success was the SME Idol project where 20 Thai SMEs landed nearly 100 orders at the HKTDC Houseware Fair. HKTDC also bring Hong Kong companies to Thailand. Recently, we matched the Thai Ministry of Industry with Hong Kong Cyberport, leading to the founding of the Bt500 million InnoSpace Thailand. On the lifestyle front, we brought Hong Kong Asia Distribution (HKAD) to establish a multi-lifestyle product brand, DG Studio, in Thailand.”

Apart from various activities facilitated by HKTDC, such as international exhibitions, conferences, business missions, and research database, collaborative projects are key to a sustainable growth for Thai SMEs as listed below:

InnoSpace Thailand: a Bt500-million public-private venture with funds from PTT, Siam Cement Group, Charoen Pokphand Group, Thai Beverage, and Bangkok Bank. In collaboration with the Hong Kong Cyberport, both sides utilise strategic access to Asean market in Thailand, venture capital network in Hong Kong, talents and experiences of Hong Kong Cyberport project to groom start-ups from both regions. The project is located in the Eastern Economic Corridor of Innovation (EECi) in Rayong Province.

Thai Access to International Markets: Active since 2014, the joint project with Thailand’s Office of SMEs Promotion provides Thai designers an O2O platform to sell their products to over 50,000 international buyers. Short-listed designers, having won votes on Facebook, can sell their products at ZEN Department Store at CentralWorld, share experience at the Creative Economy Agency (CEA), and ultimately win a Cathay Pacific air ticket to DesignInspire in Hong Kong to interact with top designers from around the world.

SME Idol: Being held for the 2nd consecutive year, the project is a collaboration with Thailand’s Office of SMEs Promotion, SME Development Bank, and Community Development Department. It aims to coach SMEs on e-commerce, international sales contract, logistics, negotiation and sales in the China market as well as trade fair preparation. Target businesses are home decor, spa, scented and household products.

Eyeing Thailand as a tourism hub and a potential market for mass products, HKTDC worked with HKAD to launch a multi-lifestyle product brand with 100 per cent Hong Kong design, DG Studio, in Thailand in 2016 during the In Style Hong Kong event, held to celebrate the first anniversary of the Asean Economic Community (AEC).

DG Studio promotes Hong Kong design products, opening up distribution channels for Hong Kong products in Thailand and the region.

Michael Li Chi Fung, Managing Director, Hong Kong Asia Distribution Co Ltd (HKAD), said HKAD achieved 1,000 per cent sales growth within three years since its opening. Its product range began with gifts and mid-priced goods before expandingf to newer and more innovative products such as watches and action figures. Thais are the most stylish group of consumers in the Asean market, he said.

“We found that the key drivers for Thai consumers’ decisions are design and quality, with prices a lower priority. HKAD complements Thai retailers by offering value-added services such as product display, marketing, and events which resulted in significant sales growth in Thailand,” Fung said.

“Going forward, we hope to build a vibrant start-up ecosystem through the InnoSpace Thailand platform as well as bringing smart manufacturing to Thailand to be in line with the Thailand 4.0 aspiration. HKTDC hopes to serve more Thai companies in the future,” Sunny Chau concluded.