On October 3, 2023, Thailand’s Board of Investment (BOI) issued a new regulation clarifying the eligibility criteria for investment promotion under the BOI category “5.10 Development of software, platforms for digital services, or digital content.” To be eligible for BOI promotion under the digital activity category, projects must meet criteria related to local development, minimum investment amount, machinery and equipment, and development processes. These criteria for category 5.10 activities, along with the latest clarifications from the BOI, are detailed in the table below. Tax Incentives The BOI also clarified the method for calculating corporate income tax (CIT) exemptions. The CIT cap amount is calculated on an annual basis from the prescribed expenses incurred after applying for BOI promotion and occurring during the year for which the CIT exemption is claimed. The allowances include 100% of expenses for salaries for newly hired Thai IT personnel, technology-related training, and obtaining quality standards (such as ISO 29110). The revenue of projects that qualify for CIT exemption must be from sales or services directly related to software, platforms for digital services, or digital content developed as promoted by the BOI, including licensing fees, subscription fees, pay-per-use expenses, in-app purchase fees, usage fees, revenue sharing, advertising fees, and so on. For more details on BOI promotion for digital activities, or on any aspect of investment promotion in Thailand, please contact Athistha (Nop) Chitranukroh at [email protected] or +66 2056 5600, Napassorn Lertussavavivat at [email protected] or +66 2056 5662, or Thammapas Chanpanich at [email protected] or +66 2056 5561.

On October 9, 2023, Laos issued Presidential Decree No. 003, which raised excise tax rates for certain goods, effective immediately. The move to increase excise tax rates comes amid the marked depreciation of the Lao kip (LAK). The Lao government is trying to monitor and discourage imports of non-essential products in order to reduce the outflow of foreign currency from the country. Increasing the tax rate for some of these products is part of these efforts. The specific products and excise tax rates are listed in the table below.   This new rate policy is also in line with recent government efforts to encourage avoiding payment in foreign currency to prevent the depletion of foreign currency reserves in Laos. In this regard, commercial banks have already taken action to ration the supply of foreign currency by prioritizing imports of essential goods, such as fuel. The products listed above formalize this impetus to prioritize certain imports and discourage others deemed not essential. In addition, the increased excise tax rates on fuel-powered vehicles show the commitment of the Lao government to move toward electric vehicles, which would also lessen the country’s dependence on fuel imports. For more information on these excise tax changes, or on any aspect of Laos’ international trade regulations, please contact Tilleke & Gibbins at [email protected].

On September 15, Revenue Departmental Order No. Por. 161/2566 was published, fundamentally changing how Thailand tax residents’ offshore-sourced income will be taxed. Under the order, starting from January 1, 2024, the offshore-sourced income of tax residents will be subject to Thai personal income tax (PIT) in any year that it is brought into Thailand. The purpose of this new rule is to ensure consistent tax collection practices among tax officers and to tackle tax avoidance strategies commonly used by individual taxpayers. PIT on Offshore-Sourced Income According to the resident rule in Thailand’s Revenue Code, Thailand tax residents (i.e., persons who reside in Thailand for at least 180 days in a calendar year) are subject to PIT on their domestic-sourced and offshore-sourced income. “Offshore-sourced income” is broadly defined to include income from work, business, or assets outside Thailand. Existing Practice Currently, Thailand tax residents’ offshore-sourced income is exempted from PIT if it is brought into Thailand after the calendar year in which it was earned. This exemption was adopted 28 years ago in the Revenue Department’s interpretation stated in a resolution from February 1985. This exemption by interpretation has led some Thailand tax residents to avoid PIT by simply holding their newly earned offshore-sourced income abroad temporarily and then bringing it into Thailand at a later time. Through the years, a number of tax rulings have affirmed this practice. New PIT Collection Rules for Offshore-Sourced Income Revenue Departmental Order No. Por. 161/2566 simply revokes the favorable exemption adopted under the February 1985 resolution so that the delay tactic is no longer able to succeed in avoiding tax. Starting from January 1, 2024, the offshore-sourced income of Thailand tax residents will be subject to PIT whenever it is brought into Thailand, at which time the offshore-sourced income must be declared to

Myanmar has issued amendments levying a new tax on nonresident Myanmar citizens’ salary income. The State Administration Council (SAC) instituted the tax by amending the Union Tax Law 2023 with Law No. 55/2023 on September 12, 2023, effective from October 1, 2023, to March 31, 2024. As defined by Myanmar’s Income Tax Law, nonresident citizens are those who reside and earn income outside Myanmar at any time during the applicable financial year. The recent amendment to the Union Tax Law levies a tax on nonresident citizens’ salary income earned abroad, as detailed below, in addition to the 10% tax on other types of income obtained abroad without deducting the tax reliefs under sections 6 and 6-A of the Income Tax Law. The tax is payable in the same currency as the income obtained. This tax on nonresidents’ salary income earned abroad can be calculated according to whichever of the two methods below yields the lowest amount of tax due: The applicable salary income tax (0% to 25%) under the Union Tax Law after deduction of allowances for the respective financial year; or A 2% tax on salary income without deducting the amount of the exemption provided by sections 6 and 6-A of the Income Tax Law. Taxpayers may also subtract the amount of foreign taxes paid from the total tax calculated under this law. Employees of an overseas company who work remotely from Myanmar and receive payment from overseas are unaffected by this amendment as they are only involved as resident citizens. Payment Process Nonresident citizens must remit taxes to the Myanmar embassy in their country either monthly, quarterly, annually, or at the time of passport renewal. Evidence of tax payment must also be presented when renewing an overseas worker identification card at the Ministry of Labour, according to