Thailand Tax Evasion Law
Update | April 2017
On 01 April 2017, Revenue Code Amendment Act (No 45) was gazetted putting into effect Thailand's implementation of the Financial Action Task Force (FATF) recommendations to consider certain tax evasion acts as predicate offences under the Anti-Money Laundering Act. This Tax Insight has been updated for the prescriptions in Amendment Act (No 45).
Update | February 2016
On 24 Feb 2016, Revenue Code Amendment Act (No 41) was gazetted, putting into effect the Government's resolution to enhance the tax evasion provisions in the Revenue Code for non-filing of tax returns and tax refund claim fraud. This Tax Insight has been updated for the prescriptions in Amendment Act (No 41).
Thailand does not have comprehensive tax evasion legislation. Instead, Thailand's tax code contains briefly-worded provisions (under Section 37 of the Revenue Code) that punish tax evasion according to acts of intentional avoidance of tax, as follows:
* As amended by Revenue Code Amendment Act (No 41) gazetted on 24 Feb 2016.
Whilst these provisions strike down tax evasion by acts of intentional avoidance of tax, and whilst they prescribe quite harsh punishment, it is not the culture to prosecute under these provisions in the Revenue Code, and even as recently as August 2011, the Appeals Court confirmed for Thailand taxpayers that “the provisions in the Revenue Code are intended to boost tax collection from people, not to jail people”. The above tax evasion provisions have potential application, but the practice in Thailand is to, instead, assess additional taxes and penalties for unintentional avoidance.
** As amended by Revenue Code Amendment Act (No 45) gazetted on 1 April 2017.
As mentioned above, the culture has always been to assess additional taxes and penalties for unintentional avoidance, rather than to prosecute for tax evasion. If however the Revenue Department sees this new legislation as a way-out for them to pass on to someone else the responsibility for prosecuting for tax evasion, it could possibly become a popular provision for the Revenue Department officers to invoke?
This Tax Insight Article is general information only. It should not be used to determine any matter without consulting with an experienced Thailand tax advisor.