According to the above table, over 90% of PTTGC Group’s revenue is generated in Thailand. The Corporate Tax Rate in Thailand is 20%. However, most of PTTGC’s operations in Thailand have received tax exemption privileges and double deduction expenses from the Board of Investment (BOI).
There are 3 privileges granted from BOI:
a. Corporate income tax exemption (tax holiday) for a period of 8 years;
b. A 50% reduction of corporate income tax rate for the next 5 years; and
c. Double deduction of transportation, electricity and water costs from corporate taxable income for 10 years.
PTTGC’s Effective Tax Rate in Thailand is generally lower than Corporate Tax Rate of 20% due to many BOI certificates granted to our local operations. Our Effective Tax Rate varies year by year due to various utilization period of each BOI privilege which has different beginning activation date. Most of the local operations are tax exempted except for Refinery and Aromatic businesses. In 2014, both operations were affected by the sharp decline in oil price resulting in taxable losses. As a result, PTTGC’s Effective Tax Rate in 2014 was approximately 2%.