In 2007, the 10 states comprising The Association of South East Asian Nations (ASEAN) signed the ASEAN Economic Community (AEC) Blueprint, agreeing to form an economic community to transform ASEAN into a single market and production base with free movement of goods, services, investment, skilled labour, and freer flow of capital. KPMG's ASEAN Tax Guide, outlines the tax changes we can expect, or are already seeing, in ASEAN, and contains summaries of the tax systems of ASEAN member states.
AEC is scheduled for establishment by December 2015 (a recent shift from January 2015), although commentators and experts agree that a fully integrated economic community in the region will not exist for some time – 2015 is just the beginning.
AEC presents an opportunity for ASEAN member states to create a competitive regional environment, and it holds the potential to transform ASEAN into the world’s next economic powerhouse.
ASEAN governments must also plan for expected changes. Governments face extensive to-do lists in anticipation of AEC 2015 – the Blueprint outlines many legislative and policy changes expected of ASEAN member states before the region can fully integrate. The Blueprint is fairly quiet from a taxation point of view, with tax only mentioned directly twice:
Despite this, there are a number of other changes expected where we can infer amendments to tax policies, including:
So while the Blueprint does not call for any large transformative tax reforms in the region, there are a number of changes that we can expect or are already seeing. let us explore a few of these.
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