By Pardorn Suchiva, Legal Director

The Thai Cabinet approved, on 28 June 2022, the draft Royal Decree in principle for tax the measure to promote investment in a data center which provides value added tax (VAT) exemption on data hosting services, which include provision of servers host and related equipment to electronically store, process, and connect through internet network, as well as support services (i.e. disaster recovery sites, cloud computing, system management and information security services). The purpose of this tax measure is to promote investment in the data center in accordance with the Government’s policy to elevate Thailand as Regional Digital Hub.

A VAT registrant that wishes to apply for the exemption must be a data center operator that possesses the right qualifications and meets eligibility requirements, and also fully complies with criteria, procedures and conditions prescribed by the Director-General of the Revenue Department, and shall notify the Director-General of its application for the exemption within 5 years from the date that the Royal Decree becomes effective.

Repeal of Thailand Cheque Law

On 25 June 2022, the Thai Cabinet approved the repeal of Offences Related to the Issuance of Cheques Act B.E. 2534 (1991) (the “Cheque Act”), which is the law governing the use of cheque in Thailand and has been in force for decades. This law provided criminal penalties against an issuer of a bounced cheque. Since the country and payment channels in Thailand have significantly developed where an electronic payment system has become more popular, it was viewed that the current Cheque Act has frequently been misused by a lot of creditors as a tool for threatening and forcing their debtors to repay debt to avoid facing criminal penalties provided under this Act. In addition, this law also caused difficulty for the Thai Courts to identify an intention of related parties in the case of issuing post-dated cheques.

The repeal of this Cheque Act will become effective after 120 days from the announcement in the Royal Gazette.

Following the repeal of this law, any person who issues a bounced cheque will not face a criminal charge, if he has no corrupt intent. A creditor will only be able to file a civil lawsuit against such debtor in accordance with the provisions of the Civil and Commercial Code. On the other hand, if such bounced cheque was issued with a corrupt intent, a creditor will be able to file a criminal charge against the debtor based on grounds provided under the Penal Code (e.g. fraudulent offense under Section 341).  

If readers RSM Focus would like more information about the is article or require more information about the legal services provided by RSM (Thailand) Limited, please contact Khun Pardorn Suchiva on [email protected] as he is the Legal Director Head of legal services Bangkok.