Thailand Tax Investigations Under Summons
Update | March 2017
On 15 March 2017, Thailand's Board of Taxation issued Ruling No 41/2560, that makes it clear, tax audit officers only have the power to issue Summons for tax Investigations for not longer than 5 previous fiscal years. This Tax Insight Article has been updated for the Board of Taxation's Ruling.
Section 19 of Thailand's Revenue Code prescribes that when a tax audit officer has reason to believe that false or inadequate information has been reported in a filed tax return, the tax audit officer has the power to issue a summons requiring the taxpayer or witness to appear for providing statements, accounting records, documents or other evidence for investigation for the 2 previous fiscal years or for the 5 previous fiscal years when the tax audit officer has evidence or reason to believe that the taxpayer had intention to evade tax.
But in addition to the above words, Section 19 also contains a proviso (in favor of the audit officers) that the 2 and 5 previous fiscal year periods are subject to fiscal year periods that are "extended or postponed by the Finance Minister".
As the 10 years statute of limitations period (under Thailand's Civil and Commercial Code) is expiring at the end of March 2017 for action against the taxpayer(s) involved in the Ample Rich Tax Case (see our Share Transfer Benefits Tax Article), the Revenue Department asked the Board of Taxation whether or not the Minister of Finance is able to exercise his power under Section 3 octo of the Revenue Code to extend the 5 previous years period for the Revenue Department to issue a summons under Section 19 of the Revenue Code?
At it's Meeting No 46/2560 on 7 March 2017, the Board of Taxation ruled that as Section 3 octo is a general provision (not a specific provision as Section 19 is) and that it deals with tax returns to be filed (not tax returns that have been filed), Section 3 octo is not applicable for extending or postponing the 5 previous fiscal years period as prescribed in Section 19 of the Revenue Code.
This Board of Taxation Ruling makes it pretty clear that the tax audit officers only have the power to issue Summons for tax Investigations in Thailand for no longer than the maximum period of 5 previous years as prescribed in Section 19.
This is a general information Tax Insight Article. It should not be used to determine any particular matter without consulting with your experienced Thailand tax advisor.