TAX STRUCTURES IN

DEVELOPING COUNTRIES

Betina Malta S. Bergonio

MPA 505
THAILAND
MAJOR TAXES IMPOSED

 Direct Taxes
 Personal Income Tax
 Corporate Income Tax
 Petroleum Income Tax

 Indirect Taxes
 Value Added Tax
 Specific Business Tax
 Customs Duties
 Excise Tax
 Stamp Duties
Tax Administration Structure

• Revenue Department of the Ministry of Finance

– personal income tax
– corporate income tax
– petroleum income tax
– value added tax
– specific business tax
– stamp duties
Tax Administration Structure
• Customs Department, Ministry of Finance
– customs duties

• Excise Department, Ministry of Finance

– excise tax
TWO VAT RATES

• 0%
– Exports of goods
– Provisions of services that are used abroad
– Sales of goods or services to the UN
– Sales of goods or provisions of services to government agencies under projects
funded by a foreign loan or aid

• 7%
– Imports of goods or sales of goods or provision of services
FREE TRADE AGREEMENT

• agreements involve cooperation between at

least two countries to reduce trade barriers –
import quotas and tariffs – and to increase trade
of goods and services with each other.
– ASEAN Member states
– Australia
– Chile
– India
– Japan
– New Zealand
– Peru
TAX TREATY

• Government-to-government agreement to
prevent double taxation and tax evasion
by the resident of one country earning an
income in the other.
COUNTRIES THAT HAVE CONCLUDED
DOUBLE TAX TREATIES WITH THAILAND

Armenia Belgium Czech Republic

Australia Bulgaria Denmark

Austria Canada Estonia

Bahrain Chile Finland

Bangladesh China France

Belarus Cyprus Germany

COUNTRIES THAT HAVE CONCLUDED
DOUBLE TAX TREATIES WITH THAILAND
Hong Kong Kuwait Norway

Hungary Laos Oman

India Luxembourg Pakistan

Indonesia Malaysia Philippines

Ireland Mauritius Poland

Israel Myanmar Romania

Italy Nepal Russia

Japan Netherlands Seychelles

Korea, New Zealand Singapore

COUNTRIES THAT HAVE CONCLUDED DOUBLE
TAX TREATIES WITH THAILAND

Slovenia Switzerland United Arab Emirates

South Africa Taiwan United Kingdom

Spain Tajikistan United States

Sri Lanka Turkey Uzbekistan

Sweden Ukraine Vietnam

Tax Covered Under the Treaties

• tax treaties cover taxes on income and on the

capital of individual and juristic entities. The
Petroleum Income Tax is covered under most
treaties except the treaty with The Netherlands.
Local Development Tax is also covered under
some treaties, but Value Added Tax and Specific
Business Tax are not covered under any tax
treaty.
INDIA
TAX SYSTEM

• The tax system in India allows for two types of

taxes—Direct and Indirect Tax
Role of the Central and State Government

• Central Government
– customs duty
– income tax
– service tax
– central excise tax
• State Government
– agricultural income
– professional tax
– value added tax (VAT)
– state excise duty
– land revenue
– stamp duty
GOODS AND SERVICES TAX (GST)

• an indirect tax levied on the supply of

goods and services. This law has replaced
many indirect tax laws that previously
existed in India.
• Goods and Service Tax Act came into
effect on 1st July 2017
• all the taxes will directly be collected at the
point of consumption, and second,
consumers won’t have to pay a 'tax on tax'
VAT Rates Across India

• Nil VAT rate

– no VAT is levied on products
– These items are sold in unorganized sector and are
very basic in nature or are in natural form
• 1% VAT rate
– levied on goods of expensive nature
• 4-5% VAT rate
– includes a large number of goods that are of daily
use in nature
• General VAT rate
– the Government has full liberty to charge varied VAT
on certain articles which can be 12% to 13% in a
particular state and as high as 15% in another state
INCOME TAX RATE FY 2019-2020
 COUNTRIES HAVING DOUBLE TAXATION
TREATY WITH INDIA
ARMENIA CHINA GERMANY KAZAKSTAN MAURITIUS

AUSTRALIA CYPRUS GREECE KENYA MONGOLIA

AUSTRIA CZECH REPUBLIC JORDAN KOREA MONTENEGRO

BANGLADESH DENMARK HUNGARY KUWAIT MOROCCO

BELARUS EGYPT ICELAND KYRGYZ REPUBLIC MOZAMBIQUE

BELGIUM ESTONIA INDONESIA LIBYA MYANMAR

BOTSWANA ETHIOPIA IRELAND LITHUANIA NAMIBIA

BRAZIL FINLAND ISRAEL LUXEMBOURG NEPAL

BULGARIA FRANCE ITALY MALAYSIA NETHERLANDS

CANADA GEORGIA JAPAN MALTA NEW ZEALAND

COUNTRIES HAVING DOUBLE
TAXATION TREATY WITH INDIA
NORWAY SERBIA TAJIKISTAN UKRAINE
UNITED
OMAN SINGAPORE TANZANIA MEXICAN STATES

PHILIPPINES SLOVENIA THAILAND USA

TRINIDAD AND
POLAND SOUTH AFRICA TOBAGO
UZBEKISTAN

PORTUGUESE SPAIN TURKEY VIETNAM

QATAR SRI LANKA TURKMENISTAN ZAMBIA

ROMANIA SUDAN UAE

RUSSIA SWEDEN UGANDA

SAUDI ARABIA SYRIAN ARAB UNITED KINGDOM

Tax Residency Certificate

• The Government of
India has made it
mandatory for
assessee’s to obtain
Tax Residency
Certificate (TRC) from
the country of
residence to avail the
benefits of Double
Taxation Treaty in
India.