The Cabinet agrees to join the tax collection party in the digital economy era.

Cabinet approves Thailand to join the tax collection party in the digital economy era, preventing the transfer of profits to low-tax countries and attracting investors to the country. Ms. Nattareeya Thaweewong, Deputy Secretary-General to the Prime Minister for Administration, said that the Cabinet meeting approved and approved the Revenue Department to jointly sign the draft Letter of Intent to join the STTR Multilateral Instrument or STTR MLI, which is one of the principles under Pillar 2 of the proposal for tax collection in the digital economy era to prevent the erosion of the tax base and transfer profits to low-tax countries. STTR is the minimum nominal tax rate of 9 percent of income for transactions that are at risk of eroding the tax base and can easily move money, such as royalties, interest, rights to distribute insurance premiums, and financial services, so that the member economic zones take care of the tax base collected from multinational companies for high-risk transactions. In applying the STTR principle, the corporate income tax rate of the country in which the investment or trade is made must be considered. When adjusted for the tax benefits received and combined with the withholding tax rate according to the convention, if it is less than 9 percent of gross income, the country of residence of the payer of the income can collect an additional STTR tax to reach 9 percent in order to protect the tax base from multinational companies and use the income to develop the country, reducing the incentive for taxpayers to transfer profits from Thailand to low-tax countries in order to use taxes as a tool to attract investors to invest in the country. Source: Thai News Agency