THAILAND

TCCT's 2024 Vision: Regulating E-Commerce, Strengthening Oversight, and Legal Revisions

On 9 October 2023, the Trade Competition Commission of Thailand ("TCCT") unveiled its 2024 plan at the "TCCT: New Era of Free and Fair" conference. With a focus on supervising market structures and addressing unfair trade practices in the e-commerce sector, TCCT aims to ensure equitable competition.

E-Commerce

With Thailand's digital economy rapidly expanding, TCCT recognises the imperative of regulating e-commerce to ensure a level playing field. The market, valued at THB 100 billion, has witnessed substantial growth in e-commerce, e-service, and e-logistics. To combat emerging challenges, TCCT is actively studying global models, notably in the European Union (EU), to formulate guidelines that will govern the digital market. Anticipated for early 2024, these guidelines aim to address issues of competition restrictions and unfair trade practices in the digital market.

Strengthening Supervision and Revising the Law

Acknowledging a rise in mergers and acquisitions, with a value of THB 4.27 trillion during the past five years, TCCT aims to strengthen supervision to prevent potential monopolies or unfair trade practices. Moreover, to support small- and medium-sized enterprises (SMEs) in the competitive landscape, TCCT plans to revise laws, increase efficiency, and adopt an 'Ex-ante approach' to prevent unfair trade practices.

In response to industry speculation prevalent in 2022, TCCT is currently overhauling regulations and guidelines across multiple facets to align with the evolving landscape of business operations.

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New Personal Income Tax Rules for Foreign Income

Since 1987, Thai residents (i.e. individuals residing in Thailand for 180 days or more in any tax year) receiving foreign earnings have been able to rely on the ruling of Revenue Department No. Gor Kor. 0802/696 ("Old Ruling"), which provided a favourable interpretation of section 41, paragraph 2 of the Revenue Code.  Under the Old Ruling, assessable income earned abroad from work duties, business activities, or assets located outside of Thailand ("Foreign Income") was not subject to taxation if such Foreign Income was brought into Thailand after the tax year in which the Thai resident acquired such Foreign Income. In other words, the Old Ruling provided a widely used tax strategy among Thai residents to bring the Foreign Income into Thailand tax-free after keeping it offshore until the next tax year.

However, recently, the Revenue Department ("RD") issued Order No. Por. 161/2566 Re: Payment of Income Tax Pursuant to Section 41, Paragraph 2 of the Revenue Code ("New Order"), which aims to improve tax collection from Thai residents with overseas investments or income. The New Order repealed the Old Ruling and sets out a new interpretation regarding the transfer of a Foreign Income into Thailand. Under the New Order, Thai residents who bring their Foreign Income into Thailand in any tax year must include it as their assessable income in such tax year regardless of when they earned it.  However, RD further elaborated that if the Foreign Income has been taxed by a country with which Thailand has a Double Tax Agreement, Thai residents can use the taxes paid in foreign countries as tax credits in Thailand.

Currently, RD has not issued any further guideline specifying the details for tax imposed on Foreign Income, but has stated in its press release that it will further discuss this issue with the public. As such, investors should continue to monitor developments in this area.

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Personal Data Protection Committee Establishes Criteria for Appointment of Data Protection Officer

On 14 September 2023, Thailand's Personal Data Protection Committee ("PDPC") issued a notification establishing the criteria for the appointment of a data protection officer ("DPO") for data controllers and data processors ("Notification"), enlarging the DPO requirements prescribed under section 41(2) of the Personal Data Protection Act B.E. 2562 (2019) ("PDPA"). The Notification will become effective from 13 December 2023, meaning a DPO must be appointed by the effective date.

Criteria for Appointing a DPO

Under the Notification, data controllers and data processors are required to appoint a DPO when their processing activities, which are part of their core activities, require the regular monitoring of personal data or systems by reason of having personal data on a large scale. Whether data controllers and data processors are required to appoint a DPO will be determined based on the following criteria:

1. The processing activities are part of their core activities.

In brief, "core activities" means activities that are necessary and important so as to achieve the main objectives or goals in the business operation or mission of data controllers or data processors, but exclude supplementary activities which only support the operation of the data controller or the data processor, such as activities supporting human resources and information technology.


2. The processing activities require regular monitoring of personal data or systems.

Processing activities will be deemed as requiring the regular monitoring of personal data or systems when they involve tracking, monitoring, analysing, or forecasting behaviour, attitudes, or profiling, and typically involve a systematic and regular collection, use, or disclosure of personal data.

Examples of such activities include data processing relating to the utilisation of membership cards, public transport cards, electronic cards, credit scoring, consideration of insurance premiums, fraud prevention, data processing for behavioural advertising, data processing of customers or service receivers by computer network service providers or telecommunications business operators, and data processing for security surveillance of places.


3. The processing activities involve personal data on a large scale.

Whether a data controller or data processor has personal data on a "large scale" will be determined by many factors, such as the number of data subjects concerned, and the amount, category, or nature of personal data that has been collected, used, or disclosed. One of the key considerations is that collecting personal data from 100,000 data subjects or more will be deemed as having personal data on a large scale.

Interesting Note

Pursuant to section 41, paragraph 5 of the PDPA, once a DPO has been appointed, the data controllers and data processors are required to notify the PDPC office and data subjects of the details of the DPO including his/her contact details and contact address. However, the Notification does not set out a specified form, procedures or timeline for reporting to the PDPC office. We expect that a further notification relevant to this matter will soon be issued given such reporting requirements prescribed in the PDPA.

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CP-Tesco Merger

Partner Supawat Srirungruang and Senior Associates Benjarong Roongmaneekul and Itthiwut Saengratanadej of R&T Asia (Thailand) acted as lead counsel for C.P. Retail Development Co., Ltd. and Lotus's Stores (Thailand) Company Limited (formerly known as Tesco Stores (Thailand) Company Limited) in Administrative Court proceedings relating to their US$10.6 billion merger in Thailand.

Filed by 38 plaintiffs, the lawsuit alleged that the Disputed Order of the Trade Competition Commission of Thailand in approving the merger between the two retail giants was unlawful, issued in bad faith and failed to ensure free and fair trade among businesses.

On 24 May 2021, the Central Administrative Court dismissed the plaintiffs' request to stay the execution of the Disputed Order and permitted operations of the merged business to continue, finding that there were no reasonable grounds indicating that the Disputed Order was unlawful. The Court then rendered a judgement on 8 September 2023 affirming the lawfulness of the Disputed Order in all aspects, dismissing the case and bringing the litigation process to a close.

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Malaysia, Indonesia and Thailand Sign Memoranda of Understanding to Extend Use of Local Currencies for Bilateral Transactions

On 25 August 2023, Bank Negara Malaysia ("BNM") announced that Bank Indonesia, Bank of Thailand and BNM concluded the signing of three bilateral Memoranda of Understanding ("MOUs"), which relate to the Framework for Cooperation to Promote Bilateral Transactions in Local Currencies between the countries ("Framework"). The MOUs expand the scope of the Framework to include more eligible cross-border transactions beyond trade and direct investment. This will be implemented gradually.

The MOUs will fortify cross-border economic activities, improve regional financial market stability, and deepen local currency markets in the three countries. They will also synergise with cross-border payment initiatives for more accessible and efficient local currency settlements.

The MOUs supersede the MOUs on local currency settlement framework which were signed by the three central banks in August 2015 and December 2016.

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Certain Digital Platform Service Providers Required to Notify Users of T&Cs by 3 January 2024

The Royal Decree on Digital Platform Service Businesses Requiring Notification, which came into operation on 20 August 2023, requires digital platform service providers to notify users of the terms and conditions ("T&Cs") of their services prior to or at the time of using such services. This obligation is imposed on digital platform services with specific characteristics, i.e. an online marketplace and a search engine platform.

On 21 August 2023, the Electronic Transactions Development Agency ("ETDA") issued a notification specifying details which must be provided in the T&Cs, as well as an annual reporting obligation ("Notification"). The Notification will come into effect on 3 January 2024, which means digital platform operators must review and revise their existing T&Cs to comply with the requirements by the effective date. One of the key requirements stipulated in the Notification is that the T&Cs must be made available in Thai language, and the operators must report on their compliance with this provision to ETDA on an annual basis.

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