ASEAN Regulatory Brief: Tax Incentives for Car Manufacturers, Tax Statistics, and New Financial and Tax Incentives

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In this ASEAN Regulatory Brief, we look at some of the important regulatory changes taking place in Vietnam, Singapore, and Thailand during the 1st half of October.

Vietnam
  • Finance Ministry mulls tax incentives for car manufacturers

Vietnam’s Finance Ministry is currently mulling tax incentive proposals sent by car manufacturing groups, such as the Japan Business Association. The manufacturing groups are pushing Vietnam to adopt a number of measures, including:

  • Exempting imported car parts from import duties
  • Reducing luxury tax on cars from 45% to 30%
  • Provision of tax incentives and financial aid from the government

The possible tax incentives come on the back of Vietnam’s recent announcement that certain automobiles, depending on their engine displacement values, will receive a special consumption tax (SCT) rebate beginning July 1, 2016. However, other cars will see a higher tax compared to their current levels.

Related-Reading-Icon-Asean LinkRELATED: Vietnam to Give Certain Automobiles a Special Consumption Tax Rebate
Singapore
  • 2014 tax statistics released

The Inland Revenue Authority of Singapore (IRAS) has released its tax statistics for fiscal year 2014. Key takeaways from the report include:

  • S$43.4 billion in revenue was collected (representing 71.3% of Government Operating Revenue) – 4.4% higher than collections in 2013-14
  • S$8.9 billion in individual income tax was collected
  • S$13.4 billion in corporate income tax was collected
  • Goods and services tax (GST) collection increased from S$9.5 billion to S$10.2 billion due to moderate growth in private consumption expenditure 
  • S$4 billion in property tax was collected
  • Stamp duty collections decreased from S$3.9 billion to S$2.8 billion due to a lower volume of property transactions in the wake of property market cooling measures
Thailand
  • Draft amendments to the Investment Promotion Act approved

Thailand’s government has recently approved a series of draft amendments to the country’s Investment Promotion Act. Thailand’s Board of Investment (BOI) had proposed the measures in order to attract a higher level of investment through the provision of new financial and tax incentives.

Professional Service_CB icons_2015 RELATED: Dezan Shira & Associates’ Tax and Compliance Services

Among the draft amendments expected to be implemented are the following:

  • Tax exemptions for the import of machinery and raw materials that will be used for research-and-development purposes
  • Exemption of corporate income tax (CIT) for up to 13 years for targeted businesses, such as those focused on the R&D and innovations
  • Deductions for investment costs and the extension of dividend payment
  • Reducing inspection time by allowing outsiders to help the BOI inspect imported machines and raw materials


About Us

Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email asean@dezshira.com or visit www.dezshira.com.

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