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Draft of legal provision regarding transfer pricing
Since the Departmental Instruction No. Paw. 113/2545 is an instruction without the virtue of law, and the current Revenue Code provides the tax payer to claim for “the reasonable cause” being as the exception of power of the assessment, therefore Revenue would like to issue the new legal provision for providing the power of the assessment officer as to assess income or expense to one related juristic person, however another related juristic person who will be affected from such assessment, has the right to refund tax as result, as follows:
Draft of legal provision regarding transfer pricing
Section 71 bis
- In the case where any juristic company or partnership, which there are two juristic persons onwards having the relationship one another in the aspect of capital, management, or control, whether directly or indirectly, and has the specification of conditions between one another in the commercial and financial aspect, which is different from a proper specification in case of such juristic company or partnership carrying on an independent basis, the assessment officer has the power to assess an income or expense of such juristic company or partnership as to adjust for getting the amount of an income receivable or expense payable in case of such juristic company or partnership carrying on an independent basis in accordance with the terms, methods, and conditions as specified by Director-General with an approval of Minister.
- In case where the assessment of income or expense of the juristic company or partnership, which has a relationship one another according to the first paragraph that was affected to any juristic company or partnership, which has paid tax or has been withheld tax at source and has already remitted in the amount exceeding the proper tax as paid or without duty to pay tax, such juristic company or partnership has the right to file the petition for refund within 60 days from the date of receiving a notice of assessment or within 3 years from the last day of due time for tax filing according to the prescription by law.
Section 71 ter
- Within 150 days from the last day of accounting period, a juristic company or partnership, which has a relationship one another under Section 71 bis, there shall prepare and submit documents or evidences as shown a relationship in the aspect of capital, management, or control, whether directly or indirectly, and the method of the calculation of income and expense one another shall be also submitted to the assessment officer in accordance with the terms, methods, and conditions as specified by Director-General.
- In case where the juristic company or partnership, which has a relationship one another under Section 71 bis, does not prepare and submit the documents or evidences to the assessment officer within the period as specified in first paragraph, or prepare the incorrect and inaccurate documents or evidences, or prepare the incomplete documents or evidence, which is not compliance with the specification without reasonable cause, there shall be punished with penalty not exceeding at Baht 400,000.
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