Thailand Dumps Tax Holidays, Bets on Refundable Credits
The clock is ticking toward the OECD’s 15% global minimum corporate tax, and Thailand just hit the reset button on its famed tax-holiday playbook. In a joint move, the Finance Ministry and the Board of Investment (BOI) will swap long-standing corporate income tax exemptions for Qualified Refundable Tax Credits (QRTCs), a tool blessed by the OECD. The makeover, first outlined in The Nation Thailand, kicks in for fiscal years starting 1 January 2025.
Under BOI Announcement No. 1/2023, multinationals that once enjoyed zero tax will instead get a 50% rate cut for up to ten years, keeping their effective tax rate near, but never below, the 15% floor. BOI chief Narit Therdsteerasukdi called the two-year window ahead “a golden era for investment,” arguing the credits will “retain competitiveness while closing profit-shifting loopholes.”
The reaction was swift. Tax advisers say the shift finally aligns Thailand with Pillar Two rules and shields investors from surprise top-up taxes in their home countries. Still, some export-heavy manufacturers worry that cash-flow timing, with credits coming after tax is paid, could pinch margins.
Around the Tax World
- France says ‘non merci’ to a higher airline levy but will rally peers at COP30 to copy its €1.50,€18 “solidarity tax” on tickets to fund climate projects (RFI).
- Trump targets Paris again. The former U.S. president blasted France’s proposed 25% minimum tax on foreign tech profits and a doubled digital services tax, warning of reprisals on Fox News (RFI link above).
- UAE signs on to CRS 2.0. Abu Dhabi’s finance ministry adopted the OECD’s upgraded data-sharing standard to cement its “transparent hub” image (TechAfrica News).
- Ottawa hits pause on bare-trust rules. Canada’s 2025 budget delays new reporting and scraps a planned capital-gains hike, while axing the Entrepreneurs’ Incentive (Mondaq).
- Berlin eyes crypto’s long-term escape hatch. German lawmakers want to end the one-year tax-free holding rule for digital assets, a move that could rattle hodlers (CryptoRank).
Tax Stat of the Day
15%, the minimum effective rate multinationals must now hit in every jurisdiction once Pillar Two rules start on 1 January 2025.
Looking Ahead
All eyes are on Thailand’s draft QRTC decree, expected by Q2 2026; meanwhile, the EU finance ministers meet next week to debate a bloc-wide crypto tax blueprint.