Thailand joined the BEPS Inclusive Framework in mid 2017 committing itself to implement four minimum BEPS standards, namely: harmful tax practices, treaty shopping, transfer pricing documentation, and Mutual Agreement Procedures, as well as improving transparency. Later on 5 December 2017, the European Union (EU) has published a list of non-cooperative jurisdictions on tax matters, and placed Thailand on its grey list under the category of existence of harmful tax regimes. One of the possible schemes that may be under the spotlight of the harmful tax regime may be the International Headquarters (IHQ) regime under the Royal Decree No. 586 and the related schemes such as Regional Operating Headquarter (ROH), International Trading Center (ITC), etc.

According to the published EU grey list, Thailand has committed to amend or abolish the identified regimes by 2018. There has not been any public information as to how the regime will be revised or whether it will be repealed, or whether there will be any grandfathering clause to extend the tax benefits for the existing IHQ companies supplemented to the revision or cancellation of the regime. This piece of the information should alert the IHQ companies to further plan its business structure to be prepared for the changes.

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