Greetings and welcome to the second instalment of the ASEAN Investment & Tax News of 2021.
After almost a decade of negotiations, the Regional Comprehensive Economic Partnership (“RCEP”) Agreement was signed on 15 November 2020 by 15 countries including all 10 ASEAN members, along with Australia, China, Japan, New Zealand and South Korea. Together, these RCEP participating countries account for about 30% of the global GDP and 30% of the world population. The ratification of the RCEP is expected to improve market access with tariffs and quotas eliminated in over 65% of goods traded and spur economic growth of the region which could be an important element of recovery from the COVID-19 pandemic.
Whilst RCEP presents opportunities in ASEAN, the military coup in Myanmar is a great concern and may have destabilising effects on the strategic environment of ASEAN. On 1 February 2021, the military in Myanmar declared a one-year state of emergency in Myanmar. According to the World Bank, Myanmar's economy is expected to contract by 10% this year. The forecast is a sharp reversal from the World Bank's previous economic update in October 2020, when it predicted Myanmar's economy would grow by 5.9%.
With hopes of a turnaround in the pandemic later this year, our tax experts continue to analyse and bring the latest in-depth updates and reforms from around the region.
Singapore is our feature article which discusses how Singapore is supporting businesses in Singapore to accelerate digital transformation, as some of the key takeaways from the Singapore Budget 2021 announced on 16 February 2021.
In Malaysia, we discuss the recent Service Tax developments covering the Guide on Management Services and Guide on Information Services as well as the Service Tax (Amendment) (No. 2) Regulations 2020 gazetted on 31 December 2020.
Over in Thailand, our colleagues discuss the updates on transfer pricing in Thailand.
In Laos, we discuss the key highlights of recent instructions on the implementation of the income tax law covering profit tax, personal income tax, dividend tax and income tax on royalties and loan interest.
Meanwhile, in Cambodia, our colleagues talk about the Cambodia-Malaysia Double Tax Agreement (“DTA”) which came into effect on 1 January 2021.
Finally, in Indonesia, we discuss the Regulation No. 237 PMK.010/2020 recently issued by the Indonesian Ministry of Finance providing guidance on tax facilities available to companies doing business in Special Economic Zones (Kawasan Ekonomi Khusus or KEKs).
Read more as we continue to delve into the latest Investment and Tax news in ASEAN.