Thailand Half-Year Corporate Tax Return Audits
Tax Insight | December 2014
Immediately following the change in the Thailand Revenue Department’s Director-General on 1 July 2014, the new Director-General announced a policy U-turn for the collection of additional tax to plug its tax receipts deficit, by aborting the then-in-progress tax audits of expensive house and car owners, and "putting all effort into collecting as much tax as we can for the rest of this year by compromising with taxpayers and educating and adjusting their attitudes and focusing on large companies that are tax dodgers”.
For non-tax-dodging large companies who may be on the receiving end of a Revenue Department's "compromising with taxpayers and educating and adjusting their attitudes” and receiving a letter saying your company must pay a 20% half-year tax penalty under Section 67 ter of the Revenue Code, here's a couple of tips:
1. If your PND 51 half-year tax return was filed on the basis of the Revenue Department's Paw 50/2537 dated 31 August 2537, but your Revenue audit officers don't accept it and give you obscure reasons for not accepting it, you have the right to refuse to accept the reasons and direct your audit officers to the determination in Clause 3 of their Internal Regulation No Mor Gor 28, which prescribes as follows:
If a company estimates a net profit amount and files a half year tax return with a half year tax payment amount that is not less than one-half of the tax paid in the tax return filed for the previous year, this is considered as the company having a reasonable excuse under Section 67 ter of the Revenue Code.
2. If the cause of your underestimated net profit in your PND51 half-year tax return is due to you having cooperated with your Revenue audit officers' instructions to file an additional PND50 tax return, you have the right to refuse to accept the 20% half-year tax penalty, and to direct your audit officers to the determination in Clause 4(2) of their Internal Regulation No Mor Gor 28, as follows:
If a company files an additional PND50 tax return as instructed to do so by a Revenue audit officer under any type of investigation other than a summons investigation, this is considered as the company having a reasonable excuse under Section 67 ter of the Revenue Code.
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.