Krungsri Securities (KSS) noted in its report that Thailand has commenced applying the 15% global minimum tax to Multinational Enterprises (MNEs) with annual revenues exceeding 750 million euros starting from January 1, 2025, as outlined by the Revenue Department (RD).
As a result of this development, KSS predicted that four sectors would be impacted by the tax changes:
1) Food export firms, like TU, currently subject to an effective tax rate of 7-8%. TU’s subsidiaries in Thailand, constituting about 35% of the company, have been supported by the Board of Investment (BOI) measures. It is expected that the company will experience an impact in their 2025 normal profit forecasts by approximately 3-8%.
2) Electronic component manufacturers, such as DELTA, operating with an effective tax rate of 7-8%. With a potential increase in the effective tax rate to 15%, the company could face a downside risk of around 12%.
3) Power plant companies with an effective tax rate ranging from 5-10%. Taking into account only the tax implications, the net profits of firms in this sector are likely to be affected by 5-10%.
4) Packaging enterprises, like SCGP, having operations in Vietnam contributing 14% to their total revenue. While these companies might face elevated tax burdens, the analyst expected the impact to be contained.
KSS suggested that the majority of the anticipated impact had likely been factored in between early to mid-December 2024. Additionally, with expectations of government subsidies to mitigate the effects for companies, along with proactive tax management strategies by the affected firms, the analyst anticipated a limited impact.
As a result, KSS advised investors to focus on stocks aligned with the new S-curve, specifically highlighting power plant companies within the infra-tech theme, such as GULF and GPSC.
