Tax benefits for International Business Centers (IBC)

The following tax benefits are specified when companies establish an International Business Center (IBC):

Corporate income tax

• Reduces the corporate income tax rate for income of IBC businesses; 
• The income of the IBC business includes the following income:

• • Income derived from providing administrative services, technical services, support services, or treasury services to affiliated enterprises in the country or abroad;
  • Royalties received from affiliated enterprises in the country or abroad, but only royalties resulting from technology research and development carried out in Thailand by the IBC itself or by others.
• Income of an IBC business that receives corporate income tax privileges does not include income from international trading operations.

• • International trade business receives personal income tax privileges only.
• Corporate income tax rate reduced to:

• • 8% of net profit in case of expenses paid to recipients in Thailand of not less than 60 million baht in each accounting period;
  • 5% of net profit in case of expenses paid to recipients in Thailand of not less than 300 million baht in each accounting period;
  • 3% of net profit in case of expenses paid to recipients in Thailand of not less than 600 million baht in each accounting period.
• Exemption of corporate income tax on dividends received from affiliated enterprises in the country or abroad.

Tax privileges: Specific business tax

• Exemption of specific business tax on income from providing treasury services to affiliated enterprises in the country or abroad.

Tax privileges: Income tax under Section 70 of the Revenue Code

• Income tax exemption for foreign juristic companies or partnerships that do not carry on business in Thailand on dividends received from an IBC;
• Income tax exemption on interest received from an IBC for foreign juristic companies or partnerships that do not carry on business in Thailand, only interest on loans borrowed by the IBC to lend to affiliated enterprises in the country or abroad that provide financial management services.

Tax benefits: Personal income tax

• IBC Reduce the personal income tax rate from the progressive rate (maximum 35%), with foreigners working full-time in IBC paying 15% of assessable income;
• Aliens must be qualified and follow the rules, procedures, and conditions outlined by the Revenue Department’s Director-General.

Period of receiving tax benefits

15 accounting periods

• If the accounting period begins on or after the date the application is submitted and approved as an IBC, that accounting period will be counted as the first accounting period;
• If an IBC application is filed and approved during any accounting period, that accounting period is considered the first accounting period, even if it is less than 12 months.