In exercise of the power under Section 10(4) and (5) of Royal Decree Issued under the Revenue Code Regarding Reduction and Exemption from Revenue Taxes (No. 405) B.E. 2545, the Director- General of the Revenue Department stipulates rules, procedures and conditions for the reduction and exemption of Income Tax for a company, which is a Regional Operating Headquarters as follows:

      Clause   1   In this Notification -

      "Regional Operating Headquarters business" means a business of providing managerial, technical or the following supporting services to its associated enterprise or its domestic and foreign branches;

      (1)   General management, business planning and business co-ordination

      (2)   Procurement of raw materials and parts

      (3)   Research and develop products

      (4)   Supporting technical assistance

      (5)   Marketing strategy planning and sales promotion

      (6)   Human resource management and training in the region

      (7)   Financial advisory services

      (8)   Analyse and research on economics and investment

      (9)   Control and management of credit

      (10)   Any other services as stipulated by the Director-General of the Revenue Department

      "Control" means control in accordance with the rules of generally accepted accounting standard.

      "Related juristic company or partnership" means a juristic company or partnership which brings the result of technological research and development carried out by Regional Operating Headquarters to produce goods or provide services to Regional Operating Headquarters, associated enterprise or foreign branch of Regional Operating Headquarters.

      "Revenue from operation of Regional Operating Headquarters business" means income that a Regional Operating Headquarter receives from its associated enterprise, its branch and associated enterprises which have controlling interest, which is reduced the Corporate Income Tax rate to 10 percent of net profits under the Royal Decree Issued under the Revenue Code Regarding Reduction and Exemption from Revenue Taxes (No. 405) B.E. 2545 as follows:

      (1)   Revenue from the provision of services by the Regional Operating Headquarters to associated enterprise or foreign branch of Regional Operating Headquarters.

      (2)   Interest received from associated enterprise or foreign branch of Regional Operating Headquarters only on interest arising from loan which Regional Operating Headquarters has borrowed to re-lend.

      (3)   Royalty received from associated enterprise or foreign branch of Regional Operating Headquarters or from related juristic company or partnership only on royalty arising from the result of technological research and development carried out in Thailand by Regional Operating Headquarters.

      Clause   2   A company that carries on Regional Operating Headquarters business and wishes to be granted benefits in accordance with the Royal Decree Issued under the Revenue Code Regarding Reduction and Exemption from Revenue Taxes (No. 405) B.E. 2545 shall notify the setting up of Regional Operating Headquarters business to the Director-General of the Revenue Department using the form notifying the setting up of Regional Operating Headquarters business which shall contain at least items specified in the form attached to this Notification. The submission shall be made at Bureau of Audit Operations (Large Business Tax Administration Office), or at Area Revenue Office, Provincial Revenue Office, or Provincial Revenue Office (Branch). In the case where a company that carries on Regional Operating Headquarters business has several places of business, the submission shall be made at Area Revenue Office, Provincial Revenue Office, or Provincial Revenue Office (Branch) in which the headquarters of the company is situated.

      Clause   3   The computation of revenues and expenses of a company that carries on Regional Operating Headquarters business shall follow the rules and conditions stipulated in Sections 65 and 65 Bis of the Revenue Code.

      In the case where a company carries on both Regional Operating Headquarters business and other businesses, the company shall compute the net profits and net loss for each business separately. Any expenses which cannot be clearly identified the business to which they belonged to, the company shall apportion such expenses in accordance with the ratio between revenue from the operation of Regional Operating Headquarters business and revenue from other business.

      Clause   4   In the case where a company carries on both Regional Operating Headquarters business and other businesses, if the Regional Operating Headquarters business incurs loss, such loss shall be remained with the Regional Operating Headquarters business.

      Clause   5   A company that carries on Regional Operating Headquarters business shall file a Corporate Income Tax return together with a balance sheet, working and profit and loss accounts within 150 days from the last day of an accounting period in the form stipulated by the Director-General and shall pay taxes in accordance with Sections 68 and 69 of the Revenue Code, and shall file a Corporate Income Tax return within 2 months from the last day of the first six months of an accounting period in the form stipulated by the Director-General and shall pay taxes in accordance with Section 67 Bis of the Revenue Code.

      In the case where a company carries on both Regional Operating Headquarters business and other businesses, the company shall file the Corporate Income Tax returns for each business separately together with a working and profit and loss accounts. The balance sheet shall be filed with either business. In filing Corporate Income Tax return, one Tax Identification Number (TIN) shall be applied.

      Clause   6   A company that carries on Regional Operating Headquarters business and that has notified the setting up of a Regional Operating Headquarter business in any accounting period, shall be entitled to reduction and exemption of Corporate Income Tax under the Royal Decree Issued under the Revenue Code Regarding Reduction and Exemption from Revenue Taxes (No. 405) B.E. 2545 from that accounting period.

      Clause   7   In case where there is a problem in practice, the Director-General of the Revenue Department shall have the power to make decisions, and his decisions shall be treated as rules, procedures and conditions prescribed under this Notificaiton.

      Clause   8   This Notification shall be effective on and from the 16th day of August B.E. 2545.