Wittayakorn Maneenetr, Deputy Director General of the Department of International Trade Promotion, presided over the opening ceremony as chaIrman on 25 January 2019 at the International College of Rangsit University, Pathum Thani Province.

Wittayakorn said that the “Thaitrade.com’s Young e-Entrepreneurs” Project is aimed at extending opportunities to Thai Entrepreneurs who are seller members on Thaitrade.com, the Department’s B2B2C international e-marketplace.

“We have been able to identify the pain points Thai business owners encounter when they shift their international online sales from wholesale (B2B) to retail (B2C). Having a new generation of university students familiar with the use of technology to be trained and guided by our e-commerce partners will alleviate these pain points. For this pilot project, we are working closely with global e-commerce gIants, including DHL Express, Amazon.com, to groom undergraduate students from the International College of Rangsit University to become e-Commerce assistants for Thai business owners, starting with Thaitrade.com’s members who, to a certaIn extent, are already e-commerce ready,” he said.

Patricia Moreira, managing director of international secretariat of Transparency International, said Thailand’s score was 36 out of 100 last year, down from 37 a year earlier.

She explained that corruption undermines democracy, leads to a vicious cycle and weakens democratic institutions, eventually corruption becomes so ingrained in society that it cannot be eliminated.

Since 1995, the index is published annually by Berlin-based Transparency International, which ranks countries “by their corruption levels, as set by expert assessments and opinion surveys”.

Jim Sutter, CEO of US Soybean Export Council (USSEC), said during a recent visit to Bangkok that China’s purchases of American soybeans had dropped sharply as a result of the trade stand-off.

As the world’s largest soybean producer with last year’s output at 125 million tonnes, the US exports as much as 60 per cent of its domestic production. Of that, exports to China totalled 30 million tonnes during September 2017-2018, but shipments bound for the Chinese market have since declined significantly to only 5 million tonnes this year.

This has prompted the US soybean sector to find new markets to offset the losses.

According to Sutter, who recently led the delegation of soybean farmers and exporters to China, Thailand and Vietnam, US soybean exports to Thailand have increased 30 per cent over the past year to over 2 million tonnes annually.

Soybeans are mainly used for animal feed, the human food industry and other industries.

Besides Thailand, other major markets include Vietnam, Japan, Korea, and European countries. Myanmar and India are also seen as new markets for US soybeans to offset the reduced exports to China.

The US and China earlier agreed to a 90-day truce in the hope of reaching a deal to end their bilateral trade tensions by March 1, 2019.

Sutter said the US soybean sector hopes to re-energise export markets with quality products in terms of purity, protein level and the option to choose among genetically-modified (GM) and non-GM soybeans.

The non-modified beans are 10-15 per cent more expensive than GM products.

Competition from Brazil

Sutter sees free trade as key to the success of US soybean growers, who seek to sell more overseas than in domestic markets. They face competition from Brazil, with 2018 output of 122 million tonnes.

Along with product quality, US producers also focus on sustainable farming methods, he said.

Earlier, Thailand was put on a US list of 16 countries with significant trade surpluses with the US. For the first 10 months of 2018, Thailand’s trade with the US totalled US$37 billion (Bt1.16 trillion) with the US recording a trade deficit of $16.2 billion (Bt510 billion) with Thailand.

Previously, the Trump administration threatened to slap high tariff rates or impose non-tariff barriers against Thai exports in a bid to reduce the US’s trade deficits with key trading partners.

Thailand’s International Business Centre (IBC) came into effect last December 29, replacing three prior headquarter incentive regimes -– International Headquarters (IHQ), Regional Operating Headquarters (ROH) and International Trading Centre (ITC).

Current beneficiaries of these regimes can continue to enjoy tax benefits until the originally granted incentive period runs out. The exception to this are companies operating under the 2002 ROH regime that lacked such a time limit – they will only enjoy the incentives until the end of 2020.

The new IBC scheme was introduced in response to an OECD review conducted last year, which concluded that the tax incentive regimes of Thailand presented opportunities for harmful tax practices and needed to be amended. The review was performed in the context of the inclusive framework on base erosion and profit shifting (BEPS).

The new IBC regime offers reduced corporate income tax rates of 8 per cent, 5 per cent or 3 per cent on qualifying services income received from affiliates. The rate will depend on the level of annual expenditure in Thailand – Bt60 million, Bt300 million and Bt600 million, respectively. Unlike its predecessor schemes, IHQ and ROH, IBC does not distinguish between Thai and foreign sourced income.

Dividends received by IBC from its subsidiaries are exempt from Thai tax. Tax exemption on gains realised from disposal of shares in subsidiaries, which was one of the attractive features of IHQ, is no longer available under IBC.

Qualifying dividends and interest paid by the IBC to foreign recipients are exempt from Thai withholding tax. Companies considering transitioning from their existing IHQ or ROH will need to pay all existing profits out as dividends within a year from the conversion in order to be able to obtain withholding tax exemption.

Eligible expatriate employees of IBC will be entitled to the flat personal income tax rate of 15 per cent, consistent with the benefits provided under ROH and IHQ. Details of expatriate employees who will be eligible will be prescribed in rules and regulations to be issued by the director-general of the RD.

In order to be eligible for tax incentives under IBC, companies will have to meet certain criteria, including maintaining paid-up capital of at least Bt10 million and employing at least 10 skilled employees. If a company with IBC status fails to satisfy the criteria for more than one consecutive year, its IBC status may be revoked and the tax incentives clawed back, with penalties and surcharges, from the first year the incentive was granted.

The duration of tax incentives under IBC is 15 years.

The headquarter tax preferential regimes have been a feature of Thai tax law for nearly two decades. The government introduced them as it strove to compete with Singapore, Hong Kong and Malaysia for the regional hub status and to create incentives for multinational companies to locate their headquarters and shared centres in Thailand.

It is good to see that, amid the current international tax developments, the Thai government continues to focus on this strategy and promote Thailand as an attractive regional hub.

Contributed by TATIANA BESPALOVA , tax partner, international tax, KPMG Thailand.

Airbus and Thailand’s Civil Aviation Training Centre (CATC) yesterday signed a Memorandum of Understanding (MoU) to work together to develop and implement maintenance training and pilot training courses in the country.

Under the agreement, Airbus and the CATC will identify areas to develop their cooperation to train aviation professionals in the country. Airbus has begun working with the CATC on basic maintenance training courses, and this could be expanded to include additional maintenance courses as well as extensive flight training courses for pilots.

The goal is to support the development of the country’s aviation industry by helping to ensure a steady supply of pilots, engineers and mechanics for Thailand’s airlines and maintenance, repair and overhaul (MRO) centres.

Airbus has forecast a demand for 220,000 new pilots and more than 260,000 new technicians in the Asia-Pacific region over the next 20 years.

“Thailand is an important partner for Airbus, as well as one of the fastest growing aviation markets in the region,” said Jean-Francois Laval, executive vice president, Asia, for Airbus. “This allows us to work together to provide the highest levels of training needed to meet the increasing need for qualified aviation professionals in the country.”

Kasititorn Pooparadai, senior executive vice president of Digital Economy Promotion Agency (DEPA), said that the agency had conducted a Totally IT market survey for 2017-2019 in October last year.

The survey showed that the total value of the IT market will be around Bt527 billion in 2019, growing around 13.67 per cent over last year. The hardware market will make up 44 per cent, followed by smart devices including CCTV and smart Bluetooth valued at around Bt121 billion or 23 per cent.

Meanwhile, software services will account for 20 per cent with Bt106 billion and digital services will be valued at Bt65 billion, or 12 per cent.

Last year, the IT market was valued at Bt463 billion. Hardware contributed Bt223 billion, followed by smart devices Bt101 billion, software services Bt90.6 billion and digital services Bt48.6 billion.

She said the factors that drive the totally IT market are business transformation from traditional to digital, government policies or the Thailand 4.0 scheme, the coming of new technologies including big data, robotics, cloud, software as a service smart devices such as CCTV and smart Bluetooth.

Thanachart Numnonda, director of IMC Institute, said that the IT industry had changed as businesses were challenged by the digital transformation. They needed to invest in new technology to support their business and increase productivity.

The key issue enabling growth is the flow of digital use in all industries, the services sector and the growing tendency for digital usage in all sectors, including social platform, cashless society, blockchain, chat bot, programmatic and video clips including 3D, augmented reality and virtual reality. These will have an important role in public, advertising and product demonstrations.