She added that the figure is higher than the same period of last year by about 20.48 per cent.

The top importers of Thai exports under the FTA and GSP are: Asean, $10.52 billion; China, $7.05 billion; Australia, $3.92 billion; Japan, $3.02 billion; and India $1.81 billion.

Nuntawan Sakuntanaga, Commerce permanent-secretary and chairman of the NAB, said that the body agreed at a recent meeting on the schedule for the implementation of International Financial Reporting Standard 9 (IFRS 9). Those companies able to act sooner can adopt the new standard from the start of next year, Nuntawan said.

The Bank of Thailand is excluded from the IFRS 9 list, which runs into hundreds of organisations.

Now, a more detailed plan for IFRS 9 implementation is being prepared; it is to be forwarded to the NAB within one month.

The new accounting standard released by the International Accounting Standards Board addresses how to account for financial instruments, especially on how they are measured, with the aim of further increasing transparency in accountancy practices.

Paiboon Nalinthrangkurn, chairman of the Federation of Thai Capital Market Organisations (Fetco), said that Fetco unanimously approved a previous schedule for IFRS9 implementation in early 2019 for the enhancement of confidence and competitiveness, even though financial businesses and listed companies may be affected.

The federation decided on July 12 that the January 1, 2019, implementation date should not be missed otherwise it could erode confidence and competitiveness, and affect the evaluation of the overall supervision of Thai financial institutions.

“The (Fetco) meeting agreed that we should implement IFRS9 as planned as that will be most beneficial,” Paiboon said. “Several neighbouring countries have already implemented this financial accounting standard. Besides, the commercial banks which could be most hit are ready for it.”

Some impacts on capital market businesses that may arise from the IFRS9 could also be manageable, he said.

After discussions with the Thai Listed Companies Association and the Association of Thai Securities Companies, both are ready for the IFRS9, which focuses on risk management and provisions for credit losses, Paiboon said.

Fetco will work with related parties to find criteria or solutions to set a mid value of provisions for credit losses after a question on the details of provisions if several listed companies invest in the same debt instrument, he said.

Fetco also said some guidelines are not clear and that collaboration is needed to ensure they are set in the same direction. Examples of this include the lack of a specific standard in each issue, the calculation of provision for financial asset impairment, the determination of standards to measure fair values and the discretion to classify items in financial statements.

In regard to IFRS9, the guidelines for each industry should be defined for common standards and common accounting records, while easier practices should be set in the initial period and mutual understanding among auditors and supervisory units should be put on accounting records, along with the forms of financial statements and related systems, Paiboon said.

Kalin Sarasin, chairman of TCC and Board of Trade of Thailand, said that the Thai services index was introduced following the models of industrialised nations, such as the United States and Singapore, where services indicators have been used to evaluate performance of the industry.

More than 70 per cent of these countries’ gross domestic product (GDP) are contributed by the service sector. About 50-55 per cent of Thailand’s GDP came from services and are expected to rise to 70 per cent in the future, Kalin said.

“The service sector now plays a major role, given the technological assistance and reduction of workforce. In the future, workforce may have to shift to the service sector. This index will be evaluated every month to measure the industry’s growth,” he said.

Saowanee Thairungroj, president of the University of Thai Chamber of Commerce (UTCC), said the services index in June rose to 51.1 from 50.2 in the previous month and the indicator is forecast to move up to 51.5 in the next six months, reflecting the Thai economic recovery which could come from not only export but also services.

The index was conducted on 10 services including financial institutions, tourism, hotels, restaurants, properties and transportation, amounting to per cent of sector. sector.

By service, the financial institution and bank services index topped the list with the index figure of 56.1, followed by the hotel and restaurant services at 53.9, transportation services at 52.7 and tourism services at 50.3. The property services index stayed at 49.3 below the threshold.

“The index compositions by service extend from the numbers of current and future service records, orders/reservation, monthly hire, the overall business, compensation for services. We found that all of the service segments remain at satisfactory level. Only property group has not yet made a recovery,” Saowanee said.

Thanavath Phonvichai, director of UTCC’s Centre for Business and Economic Forecasting, expressed confidence on tourism to drive the Thai economy this year, next year and in the next five years, saying that when infrastructure is improved, tourism will grow continuously.

Confidence of Chinese tourists are expected to be restored with fast travel plans after the recent tragedy in Phuket which is expected to have short-term on Thailand, he said.

UTCC’s Consumer Confidence Index, based on a survey of private enterprises and businessmen by region, increased to 48.4 in June from 47.7 in the previous month due to the government’s economic stimulus measures, baht depreciation, rises in some crop prices and border trade expansion, he said.

This is partly to retain control of subsidiary companies to ensure there’s the same standard across the board, and partly to share resources. Even though a regional role seems to be cost efficient in having one person perform work in various countries, in the end, is it actually cheaper? Have all the hidden costs, i.e. for visa/work permits or tax, been discovered and considered, or are there surprises that may arise later?

There are two types of employees that perform regional roles. One performs an oversight role for the home/regional entity, and the other holds dual or multiple roles, which is termed double/multi-hatting. By being appointed to a regional role, the employee has to face tax issues in both the home country and host countries, and legal issues related to visa and work permits.

Work permit

From the Announcement of the Department of Employment on 6 March 2015, the need for a work permit is waived when attending business or board meetings. But if a foreigner has to work in Thailand, they have to apply for a work permit.

Visa

Many countries’ nationals can travel to Thailand without a visa to stay up to 30 days per trip. Other nationals, for example from China, have to apply for a visa on arrival and can stay up to 15 days. Obtaining a work permit and extending the long-term visa means the employee has to report a monthly income of at least Baht 25,000 to Baht 50,000, depending on the employee’s nationality, to the Revenue authorities.

Personal income tax

There’s no domestic tax exemption in Thailand. Working in Thailand for one day will trigger Thai tax. Therefore, if there’s no double taxation agreement in place with Thailand, it’s easy for the employee to be double taxed on the same income.

Where the employee can use the double taxation agreement, the regional employee must be aware that they mustn’t be deemed as an employee of the Thai entity in carrying out their duties in Thailand.

If the regional employee is deemed an employee of the Thai entity, they have to pay Thai personal income tax.

Payment is one way to determine who the employer is, however, it isn’t conclusive from a tax point of view. Two examples should make this clearer.

For example, if Steve is a Regional Technical Specialist dispatched by Singapore Regional Headquarters to make visits to its Thai affiliate to train the latter’s employees on technical standards, and to check whether the technological standards of the group is adhered to in the Thai manufacturing plant, Steve will be considered as performing his work according to his roles and responsibilities prescribed by the Singapore Regional Headquarters.

So, the Thai entity wouldn’t be considered as his employer. This means he isn’t obligated to pay income tax in Thailand if all the conditions under the relevant double taxation agreement are met. A second case is where the Singapore Regional Headquarters promotes its Deputy Managing Director, Maria, to be the Managing Director of its Thai subsidiary while still keeping intact her Deputy Managing Director position in the Singapore Regional Headquarters.

She will spend 60 per cent of her time in Singapore and 40 per cent in Thailand. As a result, the Thai entity has become her employer. Maria would have to pay tax for performing her roles and responsibilities for the Thai entity and could be subject to tax on her income as Deputy Managing Director if she falls under the remittance rules. Supporting documents should be maintained.

Taxation for employees with a regional role is still open to interpretation by the Revenue authority in Thailand, and even though one of the purposes of having the regional role is to cut costs, this may not happen because of the tax and legal issues the expatriate faces in Thailand. The right guidance can prevent non-compliant consequences.

JIRAPORN CHONGKAMANONT, Partner and NATCHANOND CHAROENMECHAIKUL, Senior Manager, contributed this article. If you’d like advice in this area, you can contact Natchanond Charoenmechaikul or Jiraporn Chongkamanont at PwC International Assignment Services.

It has also given the green light for the collection of a 7-per cent value added tax from foreign vendors and e-commerce platforms, said government spokesman Maj-Gen Sansern Kaewkamnerd.

The taxes will apply to those selling goods and services on Internet platforms as well as the operaters of Internet platforms such as Google, Amazon and Alibaba.

The two groups have to register their tax compliance with the Revenue Department in Thailand.

The government will first forward the draft bill to the Council of State, the government legal advisiry body, before submiting it to the National Legislative Assembly for a debate.

Anson Bailey (ASPAC leader, consumer/retail, KPMG in China) and I recently discussed the topic with other executives from leading business in rhe consumer and retail industry at KPMG’s ‘Artificial Intelligence (AI): Taking Consumer and Retail Businesses to the Next Level’ seminar.

According to the Global Consumer Executive Top of Mind survey “No Normal is the New Normal: Make disruption work for your business” , conducted by KPMG International and The Consumer Goods Forum (CGF), some companies are now being much more ambitious.

Platform businesses, for example, already invest 13 per cent of their revenue in technology – compared to less than 5 per cent for the industry as a whole.

They are also significantly more likely to have already invested in AI, AR, VR, predictive analytics, open source platforms, wearables and chatbots.

In Asia, where mobile and online penetration is extremely high, ‘O2O’ or ‘offline to online’ customer experience is becoming mainstream.

Businesses are shifting from consumption to experience, and e-commerce and m-commerce continues to be on the rise. Social media marketing is thus playing an enormous role in retail.

In fact, from the recent KPMG CEO Outlook 2018, global CEOs have the highest trust for social media sources over all others.

Similarly in Thailand, there is a growth in new social media models driving e-commerce.

Moreover, there is a rising focus in experience and destination shopping, as well as substantial buying power in women, even in traditionally non-female categories. And even with convenience stores still shaping retail in Thailand, multi-channel sales are growing through e-commerce and personalized marketing.

According to Bailey, with the changes in consumer behavior and the emergence of new business models and technologies, businesses need to think outside the box if they want to stay ahead of the game.

Providing a holistic customer experience at a rate fast enough to cater to the on-demand needs of the rising new generation of consumers is key.

Businesses need to provide offline to online experience that is authentic and relatable to the consumers, whether through the use of innovation and technologies, co-creation and collaboration, and knowledge sharing between industry players.

With the fast pace of change, AI is playing a huge part in helping businesses stay ahead of the game, allowing for quick response and customizations to the emerging retail and consumer trends in each specific markets.

AI is currently used to analyze huge amounts of retail data, including demand-driven supply chains, insightful customer decisions, mapping customer journeys, improving store efficiencies and reducing operating costs.

The new retail business model is a reality. For example, China launched its chain of ‘cashier free’ stores and Amazon has recently announced ‘Amazon Go’ store that uses facial recognition to process payments. Other companies are looking at new ways to improve their distribution channel. JD.com, a Chinese e-commerce company, is looking at a deal that will see drones servicing 300,000 distribution points in rural China. So, even in remote areas, the impact of new technologies in retail is starting to be felt.

However, it is important that businesses understand that technologies and data needs to be utilized smartly, not just for the sake of adapting new technologies. Businesses need to reexamine their overall strategy and utilize these new technologies in such a way that aligns with their business goals, help them provide better experience for customers, streamline their operation and unburden their manual processes.

NITTAYA CHETCHOTIROS, Head of Consumer Markets, KPMG in Thailand.