ASEAN Today – Regional Legal and Business News – March 2022

ASEAN Today – Regional Legal and Business News for March 2022 including an Immigration Update on the Cancelation of the Pre-Arrival PCR Test and Corporate Law News on Annual Filing and the Land and Building Tax.

 

ASEAN Economic Community News

Indo-Pacific Economic Framework
The United States and Japan plan to ask the ASEAN member states to participate in a new supply chain network to help prevent the shortage of superconductors and other strategic goods as part of a new economic framework to reduce economic reliance on China. The United States plans to launch the Indo-Pacific Economic Framework later this year and has recently sent a draft to the Japanese government for their assistance in encouraging ASEAN countries to join. Due to the continuing global economic turmoil caused by COVID-19 and the War in the Ukraine, among others, the framework aims to reduce economic security risks by rebuilding supply chains to center on friendly countries like Japan. The framework is positioning semiconductors and clean energy as priority fields and participating countries will have to expand cooperation and ensure access to necessary materials. While South Korea and Taiwan are responsible for a majority of global computer chip production, due to economic friction between Japan and South Korea, it is unlikely that South Korea would join the framework. Taiwan is also a potential supply chain problem due to Beijing’s wish to unify the island nation with the mainland.

SME Funding Issues
A new report by a cloud banking platform says that there has been a boom in SME creation growth in ASEAN in the previous two years, but that access to funding remains a problem. The report says that many ASEAN SMEs are experiencing difficulty in securing starting capital, have to rely on friends and family for loans, are experiencing cash flow issues, are unable to launch new products and services, and are having problems hiring effectively. For example, Vietnam’s Ministry of Planning and Investment says that the number of SMEs that had to dissolve increased 10% year on year in 2020. SMEs make up 98% of Vietnam’s operating enterprises and employ 5.6 million workers.

ASEAN Banking Decarbonization
A report by a global business and financial services company says that pressure from investors, regulators, and social forces are creating challenges for ASEAN banks in their plans to decarbonize their loan books and meet country-level net-zero emission targets that go beyond 2050. The report says that 15-30% of all banking system loans across ASEAN are for carbon-intensive industries that have high carbon-transition risks such as coal-fired power generation, coal mining, and oil and gas. Only a few large banks in Singapore, Malaysia, and the Philippines have explicit policies to refrain from financing new coal-fired power plants, and most ASESAN banks themselves are making slow progress in disclosing climate risks. ASEAN countries and companies issued US$30 billion worth of green and sustainability-linked bonds in the first half of 2021, while more than US$190 billion were issued by Chinese firms, and more than US$490 billion globally in the first half of 2021.

Singapore News
Blockchain Backed Services
Singapore is using blockchain to simplify business and create convenient services. The country’s Economic Development Board is using blockchain and AI to guide startups and inexperienced entrepreneurs in opening and registering new businesses. The Accounting and Corporate Regulatory Authority (ACRA) is responsible for supporting these businesses as they register and file their data with ACRA to ensure corporate transparency. ACRA’s new TrustBar platform allows the public, including potential investors, to authenticate information, such as a company’s name, directors, and office address, in real time, in business certificates and profiles. All information is kept on blockchain and that will ensure that information will be up to date for all users with very little chance of any tampering or inaccuracies. ACRA also launched the ACRA Digital Assistant (Ask Ada), a chatbot that not only answers questions; it also helps businesses with log-ins and payments.

Laos Update
Foreign Exchange Concerns
Laos announced that its overall balance of payments is negative despite a trade surplus of US$1.3 billion in 2021 because foreign exchange inflows represented only 26% of the total export value. The Bank of Lao (BL), the country’s central bank, says that it has a supply-demand mismatch in foreign currencies due to the Thai baht and US dollar. The BL also says the main challenges for Laos is the rising demand for external debt servicing and the demand for foreign currencies needed to import goods. The depreciation of the Lao kip is also impacting inflation as businesses need to spend more to buy foreign currencies to import goods. To achieve its monetary targets, the BL plans to implement a more flexible foreign exchange rate policy by applying a market-based foreign exchange system managed by the government and improve the mechanism for foreign exchange management in order to strengthen the country’s international reserves.

Vietnam Watch
E-Tax Platform
Vietnam’s General Department of Taxation launched an electronic tax portal and mobile app for foreign suppliers this month to help keep pace with the country’s strong e-commerce growth. The portal will make it easier for foreign suppliers with business on digital platforms in Vietnam to register, declare, and pay taxes. The State Bank of Vietnam will also instruct commercial banks coordinate with the tax department to offer the platform and its services to their clientele. The Vietnamese digital economy is expected to reach US$5.2 billion and rank 3rd in ASEAN in 2025.

Thailand Bulletin
Electric Vehicle Production Incentives
Thailand released new government incentives for the electric vehicle (EV) sector this month as part of its plan to shift 50% of the country’s total auto production to EVs by 2030 and become a production base for clean vehicles in ASEAN. Thailand ranks first in ASEAN in terms of total auto production output, and 11th in the 2019 global ranking. Thailand plans to attract US$12 billion in investments into EVS in the coming years and to support the production of 1.2 million EVs and 690 charging stations by 2036. The new incentives include import duty reductions for completely built-up (CBU) of battery and an excise tax cut from 8% to 2% for imported EVs. The incentive package will initially apply to 27 model types of EVs and also includes an exemption of import duties on important electrical components and subsidies on electric motorcycle production by eligible car producers. According to a 2021 EV report, the total stock of ASEAN electric-powered vehicles reached 3.4 million in 2019.

Indonesia News
Internet Content Rules
Indonesia plans to release tough new rules that will allow the government to fine and criminally charge internet and social media platforms and to make the platforms quickly remove content deemed unlawful. The proposed new rules are among the most stringent globally on social media and follow intensifying crackdowns in Indonesia on online content. Under the new rules, content deemed unlawful will have to be taken down within four hours if a request is designated as urgent. Other requests which can come from any government agency will have to be met within 24 hours.

THAILAND LEGAL REVIEW

Immigration News
Pre-Arrival RT-PCR Test Canceled
The Centre of COVID-19 Situation Administration (CCSA) officially announced the cancellation of the requirement for a RT-PCR Test before departure to Thailand. Effective April 1, 2022, all travelers entering Thailand are no longer required to obtain a pre-departure test. A medical certificate with an RT-PCR laboratory result indicating that COVID-19 was not detected that was issued no more than 72 hours before departure is no longer required. Please note that travelers are still required to obtain a Thailand Pass QR Code before entering Thailand and undertake a RT-PCR test on their first day of arrival until further official notice from the Government.

Corporate Law News
Annual Filing
All Thai limited companies and partnerships including foreign juristic companies that are conducting business in the Kingdom and whose fiscal year ended on December 31, 2021, must prepare and have their audited financial statements be approved by their shareholders within 4 months from the fiscal year ending (i.e. April 30, 2022) and submit the audited financial statements to the authorities as follows:

1) Department of Business Development (DBD): All related official forms (SBC 3 and SBC 3/1 Forms) including the audited financial statements must be submitted via the DBD’s e-filing system within one (1) month from the shareholders meeting date. The list of shareholders as at the shareholders meeting date must be submitted via the DBD’s e-filing system within 14 days from the shareholders meeting date.

2) Revenue Department (RD): All related Corporate Income Tax Returns and audited financial statements and tax payments must be submitted and paid within 150 days from the fiscal year end (i.e. May 30, 2022) to the RD or via the RD’s e-filing system.

No Reduction of Land and Building Tax
Under the Land and Building Tax Act B.E. 2562 (2019) (the “Act”), as of January 1 of each year, a taxpayer, whether an ordinary person or a juristic person who owns or occupies land or buildings, shall be responsible for a tax payment according to the notice of tax assessment from the authorized Local Government Organization, i.e., Municipality, Sub-District Administrative Organization, Bangkok Metropolitan Administration, or Pattaya City, as the case may be, by April 30 every year.

The tax rate for 2022-2023 will be imposed at the same rate as for 2021-2022. However, there will be no 90% reduction. The tax rates are as follows:

  • Agriculture 
Appraisal Value (THB) Tax Rate (%)
< 75 million 0.01
> 75-100 million 0.03
> 100-500 million 0.05
> 500-1,000 million 0.07
> 1,000 million 0.10

 

  • Residence 
  • An ordinary person who owns both land and buildings for residential purposes and whose name appears in the household registration certificate under the laws concerning civil registration
Appraisal Value (THB) Tax Rate (%)
< 25 million 0.03
> 25-50 million 0.05
> 50 million 0.10
  • An ordinary person who owns only buildings for residential purposes and whose name appears in the household registration certificate under the laws concerning civil registration
Appraisal Value (THB) Tax Rate (%)
< 40 million 0.02
> 40-60 million 0.03
> 60-90 million 0.05
> 90 million 0.10

 

  • Other residential purposes apart from (1) and (2) 
Appraisal Value (THB) Tax Rate (%)
< 50 million 0.02
> 50-75 million 0.03
> 75-100 million 0.05
> 100 million 0.10
  • Other purposes apart from agriculture and residence 
Appraisal Value (THB) Tax Rate (%)
< 50 million 0.03
> 50-200 million 0.04
> 200-1,000 million 0.05
> 1,000-5,000 million 0.06
> 5,000 million 0.07

 

  • Vacant/Non-Utilization

 

Appraisal Value (THB) Tax Rate (%)
< 50 million 0.03
> 50-200 million 0.04
> 200-1,000 million 0.05
> 1,000-5,000 million 0.06
> 5,000 million 0.07

 However, tax exemptions for taxpayers still remain unchanged including the following:

  1. a) An ordinary person who owns land and buildings with an appraisal value not exceeding 50 million Baht for agricultural purposes.
  2. b) An ordinary person who owns both land and buildings with an appraisal value not exceeding 50 million Baht for residential purposes, and whose name appears in the household registration certificate as of January 1 in such year.
  3. c) An ordinary person who owns only buildings with an appraisal value not exceeding 10 million Baht for residential purposes, and whose name appears in the household registration certificate as of January 1 in such year.

 

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