Thailand Share Transfer Gift Tax Evasion
Tax Insight | August 2011
The Wedding Gift Case (as it became know) concerns a prosecution for tax evasion over a transfer of shares in a prominent Thailand public company listed on the Stock Exchange of Thailand.
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.
The Criminal Court found for the prosecution and on 31 July 2008, it ruled that the transferor and the transferee were guilty of tax evasion and that they shall be punished in accordance with the prescriptions in the Revenue Code's tax evasion Section 37, as follows:
But the case was appealed, and on 24 Aug 2011 the Appeals Court ruled:
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.