Thailand Fiscal Regimes

Department of Mineral Fuels

Petroleum Fields

Discovered Production

Total 79 41
• Gas 51 19
onshore 2 1
offshore 49 18

• Oil 28 22
onshore 19 19
offshore 9 3

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 Department of Mineral Fuels

Thailand Fiscal Regimes

• Concession System
– Royalty & Tax Regimes
– 2 Groups
• Thailand I Regime: 1971-1981
• Thailand II Regime: 1981-1989 (outdated)
• Thailand III Regime: Post 1989
• PSC System
– Malaysia-Thailand Joint Development Area
(MT-JDA)
• MTJA PSC

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 Department of Mineral Fuels

Thailand I
• Government’s Take:
– Royalty flat 12.5%
– Petroleum Income Tax 50%
• Expense before tax
– Royalty on exported oil
– Opex
– Depreciation
• 5-yr straight line for tangible assets
• 10-yr straight line for intangible pre-production assets
– Loss carry forward 10 yr max.
• Deductions after tax
– Royalty on domestically consumed petroleum
– No carry forward for excess royalty deduction

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 Department of Mineral Fuels

Thailand III
• Government’s Take:
– Royalty
• Sliding scale rates from 5-15% on gross revenue, based on
production
– Petroleum Income Tax 50%
– Special Remuneration Benefit (SRB)
• Progressive rate from 0-75% on “Windfall Profit”

• Expense before tax

– Royalty
– SRB
– Opex
– Depreciation
• 5-yr straight line for tangible assets
• 10-yr straight line for intangible pre-production assets
– Loss carry forward 10 yr max.

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 Department of Mineral Fuels

Effective Royalty Rate

Production (B/D) Thailand I Thailand III
Rate (%) Rate (%)
1,000 12.5 5.00
2,500 12.5 5.25
5,000 12.5 5.75
7500 12.5 7.17
10,000 12.5 7.88
15,000 12.5 9.42
20,000 12.5 10.19
25,000 12.5 11.15
30,000 12.5 11.79
35,000 12.5 12.25
38,000 12.5 12.50
40,000 12.5 12.59
50,000 12.5 13.08
100,000 12.5 14.04
150,000 12.5 14.36
100,000
200,000 12.5 14.52

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 Department of Mineral Fuels

SRB
• The SRB rate normally vary y-to-y depending upon
Production /Pricing /Expenditure performance of the
year for that particular exploration block:

Rev 70

SRB Rate (%)

A= 60
50
K+ M
40
30
• A Annual Petroleum Profit per one
20
meter drilled 10
• Rev Prices, Production Volume 0 20 40 60 80 100120140
• M Cost & Expenditure, No. of Wells
A: (thousand baht)
Drilled, Efforts on E&P
• K Geological Risk Compensatory,
Initial Provider of Tax (SRB) Free
Allowance
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 Department of Mineral Fuels

Govt.’s & Company’s Take (%)

Thailand I Thailand III
Profit(incl SRB) profit

Gross Revenue 100.00 100.00 100.00

Royalty 12.50 10.00 10.00
Expenses 20.00 20.00 20.00
SRB 12.00
Net Profit 80.00 58.00 70.00
Income Tax 40.00 29.00 35.00
Tax credit 12.50
Income Tax (company paid) 27.50 29.00 35.00

Government’s Take 40.00 51.00 45.00

Company’s Take 40.00 29.00 35.00
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 Department of Mineral Fuels

Malaysia-Thailand JDA

LEGEND
BONGKOT
PTTEPI/CARIGALI

APPROX. 100 KM CARIGALI/TRITON

GULF OF THAILAND
BLOCK B-17

APPROX. 260 KM
BLOCK A-18

Songkhla APPROX. 180 KM

BLOCK C-19
APPROX. 120 KM
Pattani
APPROX. 150 KM
THAILAND APPROX. 310 KM
JERNEH

TO KERTEH
Kota Bahru

50 Km
MALAYSIA h1p1

• An area covering 7,250 sq.km within lower part of

the Gulf of Thailand
• To jointly develop by Thailand and Malaysia on
the 50:50 principals
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 PSC Fiscal Regime in the MTJDA
Department of Mineral Fuels

under Production Sharing Contract of MTJA Acts & PITAs

• Royalty (oil & gas) = 10% of annual gross proceeds from sale
(payable to MTJA) (gross prod.)

• Cost Recovery (oil & gas) = up to 50% of annual gross production

(entitled by the Contractor)

• Profit Share (oil & gas) = 50 : 50

(between MTJA : Contractor)

• Research Cess = 0.5% of the Contractor’s share of cost-recovery

and profit-share

• Export Duty on oil * = 10% of Contractor’s share of profit oil

sold outside Malaysia & Thailand
(payable to MAL and THA Customs Authorities)

• Petroleum Income Tax * = 0% of Taxable Income (1st 8 years of Prod.)

(payable to MAL and THA 10% of Taxable Income (next 7 years of Prod.)
Revenue Authorities) 20% of of Taxable Income (thereafter)
* The chargeable duty or PITA payable to Malaysian and Thai Customs and Revenue Authorities
are reduced by half from the calculated sums based on these rates 10