Director-General Notifications on Retirement Mutual Fund
Amendment on Tax Offenses Subject to Law on Anti-Money Laundering
On 6 March B.E. 2560 (2017), there is Director General Notification on Income Tax (No. 287) Subject: Rules, Procedures and Conditions of Assessable Income under Sections 40(1) and (2) of Revenue Code regarding an employer who pays an employee one-time remuneration as a result of leaving a job under Sections 48 (5) and 50 (1) of Revenue Code repealing Clause 1 (b) of Director General Notification on Income Tax (No. 45 and 73). It adds the number of funds from 2 funds to 3 funds. Therefore, an assessable income is not only the income paid by (1) a fund under the law on pension fund, (2) a fund under the law on government pension fund but also the income paid by (3) retirement mutual fund under the law on securities and exchange which arises from sale of investment units to the retirement mutual fund.
Moreover, there is also Director General Notification on Income Tax (No. 288), at the same date, Subject: Rules, Procedures and Conditions on Income Exemption for Income paid for purchasing investment units of retirement mutual fund and holding investment units of retirement mutual fund. It amends Director General Notification on Income Tax (No. 171) by adding Clause 7/1. Such new clause provides that a taxpayer who obtains investment units of retirement mutual fund from the transfer of pension fund (; however, the transfer does not include a type of purchasing the investment units of retirement mutual fund) shall not be exempted from income tax in the rate of not exceeding 15% of assessable income and not exceeding 500,000 Baht for the accounting period pursuant to Clause 7.
Amendment on 76 Acts regarding Criminal Liability of Director
On 1 April B.E. 2560 (2017), there is Act on Amendment Revenue Code (No. 45) adding a new Section 37 Ter of Revenue Code. This section designates the tax offense that is deemed to include in the offence of money laundering, namely,
- Tax evasion and fraud subject to Sections 37, 37 Bis and 90/4 for 10 Million Baht or more per tax year
- Tax refund fraud for 2 Million Baht or more per tax year
- Making false transactions or concealing assessable income and any asset resulting from an offense
And Director-General of Revenue Department by the approval of the Board of Taxation authorizes to provide the above information for the Anti-Money Laundering Office.
The reason as to the proclamation is that Thailand is one of the incorporators of Asia Pacific Group on Money Laundering (APG). Thailand requires to abide by Terms of References designated by member states and executes the guideline of Financial Action Task Force (FATF) on violent tax crime which is an offense pursuant to law on anti-money laundering. Therefore, it is proper to define offenses on tax evasion or attempt to evade a tax, and tax fraud as violent crimes and as fundamental offenses of the law on anti-money laundering.
Ruling of Board of Taxation No.40/2560
Prior to this ruling, there is a conflict between ruling of board of taxation no. 10/2528 and the Supreme Court case no. 1109/2559. The ruling no. 10/2528 states that penalty and/or surcharges, criminal fines under Section 65 Ter (6) are subject to Revenue Code only. However, the Supreme Court case provides that such penalty, surcharges and criminal fines are subject to Revenue Code and other laws as well.
The ruling no. 40/2560 reasons that the penalty, surcharges and criminal fines are sanctions, but not tax expenses. The purpose of Revenue Code is to impose tax on an offender, but not support the offender. Therefore, the penalty, surcharges and criminal fines are subject to all types of tax laws. And the board also repeals the ruling no. 10/2528.
Chevron/Land and Buildings Act/Police Order
Since the Office of the Council of State interpreted that the transportation of high speed diesel from territory to drilling platforms of Chevron in continental shelf was deemed to be oil transportation in Kingdom, Chevron was levied on oil tax and Chevron already paid 3-billion-Baht oil tax, according to ruling of Office of the Council of State.
On 21 March 2017, the cabinet approved the draft of Tax on Land and Buildings Act B.E. … (“Act”). The Act will provide assets exempted from taxation, tax base and tax rate for computation of tax reduction or exemption, and new rules for land and buildings taxation so as to comply with current situations. For example,
- a tax rate of residence is not over 0.5% of a tax base,
- a tax rate of land and buildings used for other commercial purposes (not agricultural use or a wasteland is not over 2% of a tax base,
- a tax rate of land and buildings used for agriculture is not over 0.2% of a tax base,
- a tax rate of a waste land is not over 5% of a tax base.
Additionally, this Act may enforce in March 2018.
Furthermore, the more amount of land price, the more amount of a tax rate. For example, a land for commercial or industrial uses in the amount of 20-50 Million Baht has a tax rate 0.25% (tax burden = 109,000 Baht). If the land price is more than 10 times (100-500 Million Baht, the tax rate will be 0.4% and the tax burden is quite more than 17 times (1,859,000 Baht).
Procedures subject to Section 44 of Constitutional Law (interim) in case a driver/an owner of the car obtains an order. If he does not incur a charge within scheduled time, he will receive a letter from police and has to incur the charge within 15 days as of the letter date. If he still does not pay the charge, the police will inform the accrued charge to a registrar of land transport department. Whenever he requests to pay annual car tax, the registrar shall issue a 30-day temporary circle sign and inform him to pay the accrued charge within 30 days as of the notice date. If he does not incur the accrued charge within 30 days, he will be prohibited to receive an original circle sign and the police will proceed with the investigation. Even though he can submit his disagreement letter, the police still have authority to investigate and accuse him to a court.
Inheritance Tax/Gift Tax
In case an inheritor is a spouse of a heritage owner, a non-profit organization, a non-Thai national and resident person, or a foreign company establishing in a foreign country, the inheritor shall not levied on inheritance tax. Unless such inheritor has inherited property in Thailand, they shall pay inheritance tax.
If the inheritor is a Thai national and resident person, a company registered in Thailand or having more-than-50-percent Thai shareholders and obtains net heritage more than 100 Million Baht, no matter where assets are located in Thailand, the inheritor shall pay inheritance tax. And the inheritor being parents or descendants of the heritage owner shall pay 5% of the amount exceeding 100 Million Baht. If the inheritor does not such persons, they shall pay 10% of such amounts.
The assets needed to be paid inheritance tax are immovable property (use assessment price of a land department), securities (use price at a closing date when the inheritor gets inheritance), deposits, registered vehicles, other property as prescribed by ministerial regulation. And the inheritor shall file tax return within 150 day as of the inheritance date.
Moreover, the heritage owner shall make the following plans, namely, preparing lists of assets and assess their amounts, making a will, having financial plans by buying life insurance, estimating an impact of family and business after the owner passes away, laying the foundations for children and grandchildren.
- Parents transfer ownership of property or possession rights in an immovable property to their children (not including adopted children) for free in the amount more than 20 Million Bath, or
- Parents provide gift for descendants or vice versa, or a spouse provides gift to the other spouse or vice versa in the amount more than 20 Million Bath, or
- Other gift arising from moral obligation, rituals or traditional occasions in the amount more than 10 Million Baht,
a transferor shall deduct withholding tax for 5% of the amount more than 20 or 10 Million Baht.
Moreover, the transferor can choose to deduct 5% withholding tax or take the amount more than 20 or 10 Million Baht to include in his net income and pay income tax.
Index of legal movement in relation to business
Interested tax news
Supreme Court No. 5808/2557
Making a service agreement to avoid being levied tax on royalties
Royal Decree Issued under the Revenue Code Governing Rate Decrease and Revenue Exemption (No. 624) B.E. 2560 (2017)
Royal Decree Issued under the Revenue Code on Revenue Exemption (No. 625) B.E. 2560 (2017)
Royal Decree Issued Under the Revenue Code Governing Revenue Taxes Reduction and Exemption (No.626) B.E.2560 (2017)
Royal Decree Issued Under the Revenue Code Governing Revenue Taxes Reduction and Exemption (No.627) B.E.2560 (2017)
Royal Decree Issued Under the Revenue Code Governing Revenue Taxes Reduction and Exemption (No.628) B.E.2560 (2017)
Royal Decree Issued under the Revenue Code on Revenue Exemption (No. 631) B.E. 2560 (2017)
Royal Decree Issued under the Revenue Code on Revenue Exemption (No. 632) B.E. 2560 (2017)
Royal Decree Issued under the Revenue Code Governing Exemption from Value Added Tax (No.633) B.E.2560 (2017)
Royal Decree Issued under the Revenue Code Governing on determining the cost which is allowed to deduct from assessable income. (No.634) B.E.2560 (2017)
Royal Decree Issued under the Revenue Code on Tax Exemption (No.638) B.E. 2560 (2017)
Director-General Notification Governing Income Tax (No. 283)
Rules, Procedures and Conditions of Exemption from Corporate Income Tax on the expense which is capital expenditure, or expenditure incurred in modification, alteration, extension or improvement of property related to the business which is located in Ad Hoc Special Development Zone but not for Repair in order to maintain its Present Condition under Section 65 Ter (5) of the Revenue Code
Notification of the Director-General of the Revenue Department on Income Tax (No. 284)
Rules, procedures, and conditions for the purpose to exempt income tax of a company or juristic partnership located in the Special Development Zone for a business operating target industry
Board of Taxation’s Ruling No. 40/2560
Penalties and or surcharges and criminal fines under Section 65 Ter (6) of the Revenue Code
Ruling No. GorKhor.0702/9233 Date 3 November B.E. 2559 (2016)
Corporate income tax and withholding tax in case of tax privileges for international headquarters (IHQ)