Thailand Business Operation Visit Tax Audits
Tax Insight | August 2012
Following the 1997 economic crisis, the IMF's assistance to Thailand required the Thailand Government to boost its tax revenues for the state through enhanced tax collection techniques. The Business Operation Visit (BOV) is one of the 'enhanced tax collection techniques' that most Revenue Department Area Offices commenced in the 2001 year.
A BOV is a review (as opposed to an audit or investigation). It is similar, if you like, to what a statutory auditor does when he is reviewing a listed public company's quarterly results, i.e. its a higher-level “desk top” type review, rather than a detailed audit or investigation.
Broadly, the procedures employed by the Thailand Revenue audit officers for a BOV are:
The BOV procedures also require the Revenue audit officers to visit the company’s offices as well as its factory and/or warehouse premises.
It is tailored to the Revenue Department's risk profile of a company (which is assessed by the audit officers prior to them visiting the company), and so, as the 2nd bullet point indicates, the questions asked by the audit officers during their visit to the company often indicates what it is they are focusing on.
The visit to the company is then followed by the Revenue officers' review of samples of tax returns and supporting schedules to gauge the status of the company's tax compliance.
The Revenue Department's time allocation for completion of a BOV is three months from the date of the visit to the company. If it is not completed within the 3 months time period and the audit officers remain unsatisfied, they can undertake a special review (a review of particular matters they are concerned about), or, in the case of the audit officers having suspicion that the company's tax compliance is poor, a tax investigation (i.e. a tax audit of all accounting and tax records).
It is therefore important, if the officers have detected any matter or issue, for the company to deal with that matter or issue straight away and within the 3 months time period, as failure to do so could prove to be costly to the company.
This Tax Insight is general information only. It should not be used to determine any particular matter without consulting with an experienced Thailand tax advisor.