Internet firms’ tax affairs under increased scrutiny in Southeast Asia
Thailand is the latest country looking to toughen tax collection rules for internet and technology firms like Google, Amazon and Facebook as the tax records of these companies come under growing scrutiny in entire Southeast Asia.
Thailand’s Revenue Department now set up a working committee to find solutions on tax collection for Internet and tech companies that allegedly shift profits across borders to lower their tax obligations, reports Reuters.
“The idea is to seek appropriate solutions for Thailand and it could involve an amendment in some regulations because current laws are outdated and have been used for more than 50 years,” Prasong Poontaneat, the department’s Director General, was quoted by the agency. The committee is expected to come up with solutions by the end of this year.
The move comes after Indonesia is pursuing the local Google branch for five years of back taxes, and the search giant could face a bill of more than $400 million for 2015 alone if it is found to have avoided payments.
In general, Internet and tech firms active in Southeast Asia run their business from Singapore where they also book their regional profits through internal licensing contracts, benefiting from the city state’s low tax regime and its generous tax incentive programmes.
However, Singapore’s finance ministry said in a statement last week that “profits should be taxed where activities giving rise to the profits are performed and where value is created” and that it does not condone the “artificial shifting of profits”.
The tax dealings of Google, Apple, Microsoft, eBay, Amazon and other Internet and tech firms, but also consumer brands such as Ikea, Starbucks and Gap, came to light after European antitrust regulators exposed tax-minimising company networks. They alleged that corporate tax-dodging costs the European Union between $54 billion and $76 billion a year.
Thailand is the latest country looking to toughen tax collection rules for internet and technology firms like Google, Amazon and Facebook as the tax records of these companies come under growing scrutiny in entire Southeast Asia. Thailand's Revenue Department now set up a working committee to find solutions on tax collection for Internet and tech companies that allegedly shift profits across borders to lower their tax obligations, reports Reuters. "The idea is to seek appropriate solutions for Thailand and it could involve an amendment in some regulations because current laws are outdated and have been used for more than 50...
Thailand is the latest country looking to toughen tax collection rules for internet and technology firms like Google, Amazon and Facebook as the tax records of these companies come under growing scrutiny in entire Southeast Asia.
Thailand’s Revenue Department now set up a working committee to find solutions on tax collection for Internet and tech companies that allegedly shift profits across borders to lower their tax obligations, reports Reuters.
“The idea is to seek appropriate solutions for Thailand and it could involve an amendment in some regulations because current laws are outdated and have been used for more than 50 years,” Prasong Poontaneat, the department’s Director General, was quoted by the agency. The committee is expected to come up with solutions by the end of this year.
The move comes after Indonesia is pursuing the local Google branch for five years of back taxes, and the search giant could face a bill of more than $400 million for 2015 alone if it is found to have avoided payments.
In general, Internet and tech firms active in Southeast Asia run their business from Singapore where they also book their regional profits through internal licensing contracts, benefiting from the city state’s low tax regime and its generous tax incentive programmes.
However, Singapore’s finance ministry said in a statement last week that “profits should be taxed where activities giving rise to the profits are performed and where value is created” and that it does not condone the “artificial shifting of profits”.
The tax dealings of Google, Apple, Microsoft, eBay, Amazon and other Internet and tech firms, but also consumer brands such as Ikea, Starbucks and Gap, came to light after European antitrust regulators exposed tax-minimising company networks. They alleged that corporate tax-dodging costs the European Union between $54 billion and $76 billion a year.
