WATCH MOVEMENT - SwissThai · 02 swiss thai Chamber of Commerce september 2010 Dear ... Mr Daniel Reinle Director, Stamm ... Pavinee Khetpanasant

Issue 17 September 2010

President’smessage

02

memBer PrOFiLe:BOnCaFe

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enHanCements FOr rOH taX BeneFits

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LegaL asPeCts: OWning a COndO Or HOUse

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ris/sWiss sCHOOL neWs UPdates

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WATCH MOVEMENT

02 swiss thai Chamber of Commerce september 2010

Dear Members,

The Revenue Department recently published some statistics on the personal income tax collection base in Thailand. According to these figures, out of a population of approximately 65 million, there are approximately 20 million registered taxpayers, but of these, only about 9 million actually pay tax. The rest are deemed not to have reached the minimum monthly wage of 20,000 baht, which requires a person to pay personal income tax (source: Revenue Department of Thailand). Looking at the top end of the tax bracket, only a total of around 66,000 persons reach the level of income (about 340,000 baht/month) that requires them to pay 37% income tax (on a progressive scale). It goes without saying that always the same people, that is, middle-class wage earners, employees and executives of publicly listed companies, foreign companies’ employees, etc. are being compelled to pay tax.

The tax base in this country is definitely too narrow: One just has to look around at the number of wealthy people in Bangkok to realize that a figure of only 66,000 persons in the top tax bracket is ridiculous! And I won’t even get started on the number of privately held companies who report losses or minimal profits while they seem to be flourishing. So the government has to rely heavily on indirect taxation (VAT, customs duties, excise taxes, etc.) to fill its coffers and is still running a deficit. This leaves less funds for development of infrastructure and social services to the poor population, education, etc. Wouldn’t it be nice for the Revenue Department to seek out some new customers instead of making life difficult for the same old ones, including many foreigners? Just a thought, one that could possibly be expanded on by the esteemed tax committee of the JFCCT.

Turning to internal matters, our chamber had a rather busy month in August despite the fact that several members were still on holiday. The Stamm evening on August 19th was as lively and cheerful as usual, even though attendance was somewhat below normal. I happened to bring along a visitor from my major principal in Switzerland in town, and he was suitably impressed by the members he met (including 10-30-year veteran Swiss expats) and the camaraderie among us all. On August 25th, the journalist and commentator M.L. Nattakorn Devakula did not disappoint our members during his luncheon talk with his sharp insights into the current political situation in Thailand. And just two days later on August 27th, our member company RONDA kindly organized a tour of their factory for our members, which was greatly appreciated by all participants. Many thanks to RONDA management and staff!

I am pleased to announce that Mr. Luzi Matzig, CEO of Asian Trails Ltd. (part of the Kuoni Group), has joined our Board of Directors. Mr. Matzig is a long-time resident of Thailand and is well known to many of our members. He already chairs the tourism committee of the JFCCT, and I am sure that he will contribute a great deal to the work of the STCC.

Sincerely yours,Niti MeyerPresident

STCC PrESidENT’S MESSAgE

Dr Niti Meyer PresidentMr Bruno Odermatt Vice PresidentDr Rolf Ammelburg DirectorMr Christof Gasser DirectorMr Thomas Gerber Executive DirectorMr Stefan Kuhn Director, MembershipMr Andreas Leutenegger TreasurerMr Daniel Reinle Director, StammMr Brian Sinclair-Thompson Executive DirectorMr Nophadol Siwabutr DirectorMr Thomas von Aesch Director, SMEs & NewsletterMr Nandor von der Luehe DirectorMr Dhira Yoonaidharma Director, Legal

sWisstHai neWsLetterMr Reid Nixon, Editor [email protected]

september 2010 swiss thai Chamber of Commerce 03

SPECiAL THANKS TORONDA (THAILAND) CO., LTD. for their invitation to the STCC to visit their watch movement and parts assembly factory in Samut Prakarn on August 27th, 2010. The RONDA management team under Managing Director Mr Laurant Matthey provided an excellent insight into the many detailed steps until a watch movement is completed. The visit was rounded off with generous Swiss hospitality. It was a great event!

STCC CALENdArWednesday, 8 September 2010:Compensation & Benefits Survey Breakfast at Centara Grand at Central World.Thursday, 9 September 2010:Stamm at Amari Atrium Hotel, 18.00.Thursday, 16 September 2010:Francophone Networking Autour du Zinc at lebua and The Dome at State Tower.Wednesday & Thursday, 22 & 23 September 2010:Swan Lake by Zurich Ballet at Thailand Cultural Center.

[Do you have changes among your delegates or changes to email, mobile, telephone, or fax numbers? Do you wish to list any classifieds or post any important information? Please send all updates to [email protected]]

STCC MEMBEr NEWSWWW.SWiSSTHAi.COM


MEMBEr PrOFiLE

Boncafe (Thailand) Ltd. is a leading Thai-Swiss gourmet coffee manufacturer and exporter, as well as the provider of one-stop coffee solutions for five-star hotels through to domestic consumers. Headquartered in Bangkok and its industrial base in Chonburi, Boncafe operates showrooms and service centers in many important provincial hubs all over Thailand.

Leading ManufacturerBoncafe is the leading manufacturer of roast and ground gourmet coffee and various types of powdered beverage mixes. Most of its world-class raw materials come primarily from Thailand, including Misty Mountain Thai Arabica beans from the North and Red-Earth Robusta from the South, as well as top-quality Thai sugar and fruit powders for instant mixes.

Major Exporter in Established International MarketWith international partners in the UAE, Cambodia, Singapore, Malaysia and Hong Kong, as well as distributors in many other countries, Boncafe’s products are exported to Southeast Asia, Europe and the Middle East.

F&B One-Stop Coffee-SolutionBoncafe imports, sells and services a wide range of coffee machines sourced from Switzerland, Italy, the United States and China. The company’s strength is its ability to offer a complete package of coffee equipment, technical after-sales service, quality coffee products and coffee business consultancy to the food services industry, including hotels, restaurants, fast food chains, clubs, golf courses, and staff canteens, as well as coffee shops.

Easy-Access RetailerBoncafe products are sold at its 11 showrooms nationwide, as well as major supermarkets and department store chains. Customers can also browse through the Boncafe website and place an order by email or telephone.

Boncafe (Thailand) Ltd.6/1 Ramkamhaeng 184 Road, Minburi, Bangkok 10510Thailand

Tel: +66 (0) 2693-2570Fax: +66 (0) 2693-2579Website: www.boncafe.co.th Email: [email protected]

STCC Representatives:Urs BrunnerPavinee Khetpanasant

BONCAFE


(continued on Page 6)

TAX BENEFiTS

Thailand has seen an increasing number of companies and businesses. A lot of electronic appliances, automotive assembly and petrochemical plants have turned Thailand into a hub for manufacturing in ASEAN because of the strategic location of Thailand. Tourism and hospitality businesses bring major revenues into Thailand.

To promote activities of multinational corporations in Thailand, tax benefits are provided to regional operating headquarters, or ROHs, located in Thailand.

At present, expatriates working for the ROH are eligible for a reduction of personal income tax to the rate of 15% of the income, reduced from the maximum rate of 37%, for a period of four years. The rate of corporate income tax is capped at 10% of the revenues of the ROH.

The paid-up share capital of the ROH at the end of each accounting period should be least 10 million baht.

Revenues from the services and the royalty paid from, or in, foreign countries shall not be less than 50% of the total revenues.

THAiLANd ENHANCES TAX BENEFiTS FOr rEgiONAL OPErATiNg HEAdquArTErS

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The new tax incentives for the ROH are set forth below:1. The rate of personal income tax on the income of any foreigner working for the

ROH in Thailand is 15% for a period of eight years from the date of notice of the use of the tax benefit.

2. The income of any foreigner working for the ROH outside Thailand is exempted from personal income tax in Thailand.

3. The profits of the ROH derived from services provided from the ROH to its affiliated companies outside Thailand are exempted from corporate income tax in Thailand.

4. Corporate income tax for income derived from services provided to affiliated companies in Thailand of the ROH is reduced 10% for a period of 15 years from the date of notice of the use of the tax benefit.

The ROH shall nevertheless comply with conditions for qualifying for the tax benefits. For example, the tax benefits are available if the 50% qualifying income threshold is


(continued from Page 5)

TAX BENEFiTSTHAiLANd ENHANCES TAX BENEFiTS FOr rEgiONAL OPErATiNg HEAdquArTErS


satisfied. It is not clear whether the ROH must be a company incorporated under the laws of Thailand. Existing ROHs may continue to have the tax benefits under the existing regulation or may choose to apply for new tax incentives under the new regulation.

The businesses of the ROHs shall be services including administrative services, business management and planning, business advisory services, research and development, market and technical support, and credit management and control. As a result, service income falls within qualifying income. However, trading income of the ROH is, at present, not qualifying income and shall be taxed at the standard rate of corporate income tax of Thailand at 30%.

The ROH companies shall have at least three affiliated companies in three countries other than Thailand. The first foreign affiliated company should be set up within the first two years. The second and the third foreign affiliated companies should be incorporated by the third year and the fifth year, respectively.

Expenses of at least 15 million baht per annum shall be incurred from foreign investment. However, all terms and conditions of the tax benefits to the ROHs would be issued by the Revenue Department.

Information provided by Khun Picharn Sukparangsee of Siam City Law Offices Limited, [email protected].

(continued from Page 6)



At present, it may appear that registered buildings, such as buildings that have the characteristics as condominiums and those buildings that have different characteristics from general condominiums, such as houses, twin houses and townhouses, may have the same character as land appropriation. However, according to the law, there are many differences in the rights of ownership and in the burdens of the property owner. Therefore, to avoid misunderstanding from the buyers of such condominiums, the Department of Lands has issued a notification to inform the persons who wish to buy the aforementioned properties of the crucial principals of the differences between condominiums and land appropriation, as follows:

Buying of CondominiumsThe owner of a condominium has ownership in the property comprising of the following:

1. Ownership in personal property, i.e., condominium units and buildings or land provided for each owner, such as car park area, land for small park use, etc. The affect of ownership in personal property leads to the right of the owner to dispose, allocate or perform any charge on immovable property as unconditionally valid as prescribed in the principle of the law in Section 1336 of the Civil and Commercial Code. Nevertheless, there are two cases of limitation of rights in utilizing property, as follows:

1.1. Unable to perform any activities to personal property that affect the security or results in damage to the structure of the building, even if the construction, decoration, renovation, modification of a condominium unit that affects the common property or external characteristic of the condominium are at the owner’s expense. It is stipulated by law that such activities must receive approval at a meeting of the co-owners.

1.2. Unable to perform other activities against conditions and principles as prescribed in the regulations, such as being forbidden to keep pets or being forbidden to make loud noise.

2. Ownership in common property, i.e., land where the condominium is located and land or other properties for utilizing or common use of the co-owners, such as land for a parking lot or land allocated for a flower garden for the condominium, structure and building for security, and for protecting of damage to the condominium, such as poles, foundation piles, rooftops, lofts, etc., as stipulated in Section 15 in the Condominium Act 1979 and as amended by the Condominium Act (Volume 4) of 2008. The owners of the same condominium have the right to use common property together as prescribed in regulations, e.g., the owners of all condominium units are unable to block the connecting corridors within the building for which it is a common property and located at any side of the condominium.

The managing and utilizing of common property shall be in accordance as prescribed by law and regulation; thus, the co-owners jointly have duty to pay tax and stamp duty in proportion that the co-owners have ownership in common property. And the co-owners shall jointly pay all cost incurred from the delivery of service and from mechanical and facility for convenience or for common interest, as well as the costs incurred from the maintenance and management of common property in proportion to which co-owners have ownership in common property or proportion of benefit against condominium units as prescribed in regulation.

3. Co-ownership between condominium units, i.e., room floors, room walls that divide a condominium unit, etc. that is not the structure of the building.

Buying of land with structure under land-appropriated projectThe buyer of land with structure under land-appropriated project is the proprietor of a piece of land and structure identified in contract registered by competent officer. The proprietor of such property is completely empowered to dispose of his property, utilize, rent out or perform any charge on immovable property as unconditionally valid as prescribed in the principle of the law, Section 1336 of the Civil and Commercial Code.

LEgAL ASPECTSOWNiNg A CONdOMiNiuM Or A HOuSE


(continued from Page 8)However, streets, gardens, playgrounds and other infrastructure in the project that the land developer has provided for the project, in accordance with the approved plan and project, fall into servitude for the benefit of appropriated land. The land developer is obligated to maintain this property in the same nature as originally made and can not perform any action to the extent that the benefit of servitude property is impaired or deteriorated. Therefore, expenses for maintenance of this infrastructure would be paid by the land developer and can not be claimed back for the buyer unless any action has been taken as follows:

1. The buyer has established a land-appropriated juristic person according to Land Development Act of 2000 or juristic person of other legislations, and property used as infrastructure has been transferred to procure and maintain by the juristic person.

2. The buyer has been granted approval by the Land Development Committee to proceed in any respect for infrastructure maintenance.

3. The buyer has transferred property used as infrastructure for common interest.

Providing that a land developer has provided extra facility for public service apart from that which has been stipulated in accordance with land-appropriated requirements, service and maintenance cost shall be levied from buyers in compliance with ratios approved by the Land Development Committee.

Information provided by Mr Dhira Yoonaidharma, [email protected]


riS/SWiSS SCHOOL NEWS uPdATES

Ceremony marking the beginning of the new school yearOn Monday, the 9th of August, at 9:15am, the Swiss School Bangkok arranged a ceremony marking the beginning of the new school year.

Students, teachers, administration staff, parents and other guests were greeted with welcoming words from the School Director, Dr Halter. The Director described the new school year as challenging and mentioned the most important event: from 21st to 25th March 2011, the school will be visited by a team of German inspectors of the Bund-Länder-Inspektion, who are carrying through the certification of our school. This will mark an important milestone in our quality management process that we started two years ago.

The highlights of the ceremony were the introduction of the new students and teaching staff members, as well as the music performances of Grade 4 and the teacher band of the school. After the ceremony, the students returned to their lessons, and parents and guests were entertained in the school’s coffee shop.

Elections of the school’s ‘liaison teacher’ and of the president of the student organization.The student body elected Ms Daniela Bösch, arts teacher, as the new `Liaison Teacher’ (Vertrauenslehrerin) and confirmed Lukas Halter, Grade 12, as president of the student organization (Student Council). Ms Boesch will support the students and will promote the interests of the student council, assist and advise the student representatives, and will be the link between student, teachers and management.

Congratulations to both and we wish them all the best for a rewarding year.

Education WorkshopsAll teachers took part in two workshops in preparation for the new academic year:On Wednesday, the 4th of August, Mrs Helma Meschede, a teacher from Germany, arranged a workshop and informed all teachers about ADHD (Attention Deficit Hyperactivity Disorder). Mrs Meschede presented ways to help and support students with ADHD, and the teaching staff had the opportunity to develop strategies to deal with the disorder.

On Thursday, the 5th of August, the steering committee of the school’s educational quality development and management team (PQM) arranged a workshop to discuss the school’s assessment strategies and also focused on the development of the school curriculum. The discussed school development plan promotes that all teachers will continue with the peer review program and, therefore to be able to improve teaching and learning, will work in teams to visit each other in the classrooms and then discuss the lessons.

King’s Cup Tennis tournamentThe Swiss School Bangkok is proud to support the prestigious King’s and Princess’s cup tennis tournament organized by the Swiss Alumni Association, taking place on the court of the Lawn Tennis Association in Muang Thong Thani on the 25th and 26th of September and on the 9th and 10th of October. The final takes place on the court of the Swissôtel Nai Lert Hotel, Wireless Road, on the 20th of November.

The trophy is donated by His Majesty the King for the men’s team and by HRH Princess Sirindhorn for the ladies’ team. We look forward to interesting games.

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WATCH MOVEMENT - SwissThai · 02 swiss thai Chamber of Commerce september 2010 Dear ... Mr Daniel Reinle Director, Stamm ... Pavinee Khetpanasant