Thailand Share Transfer Gift Personal Tax Evasion
On 24 August 2011, the Appeals Court overturned the Criminal Court's tax evasion verdicts for the share transfers under the Wedding Gift Tax Case. This Tax Insight has been updated for the Appeals Court rulings
The Wedding Gift Tax Case (as it became know) concerns a prosecution of tax evasion for a transfer of shares in a prominent Thailand public company listed on the Stock Exchange.
Summary of the Case
In November 1997, 4.5 million shares in the company were transferred from one individual to another individual. The share price on the Stock Exchange at the time of the transaction was 164 Baht making the market value of the share transfer transaction around 738 million Baht, but no personal income tax was paid by either the transferor or transferee.
The prosecution argued that no actual payment was made for the shares by the transferee to the transferor, that the Stock Exchange brokers' fee was only paid to make it look like a sale of shares on the Stock Exchange, that the documents recording the shares transaction were falsified documents, and that the transferee's claim that the shares from the transferor were a wedding gift was a false claim because his wedding was actually one year earlier.
Criminal Court's Verdict
The Criminal Court found for the prosecution and on 31 July 2008, it ruled that the transferor and the transferee were guilty and shall be punished under the prescriptions in the Revenue Code's tax evasion Section 37, as follows:
Appeal Court's Verdict
Citing the benefit of doubt for the transferor and no prior criminal record with good donation history for the transferee on 24 August 2011 the Appeals Court overturned the verdict of the Criminal Court, ruling as follows:
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.