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's Tax Evasion Law
Thailand does not have comprehensive tax evasion legislation. Instead, the Thailand 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:
For intentionally providing false information, false statements, false answers to questions or false evidence for avoiding payment of tax or claiming a refund a tax*
For intentionally by lie, fraud, deceit or other similar means, avoiding or attempting to avoid payment of tax or claiming a refund a tax*
Section 37 bis
For intentionally not filing a tax return for avoiding payment of tax
* As amended by the Revenue Code Amendment Act (No 41) gazetted on 24 Feb 2016.
Section 37 ter**
For an offence under the above Sections 37 and 37 bis or VAT Section 90/4 for avoiding payment of tax of 10 million Baht or more or claiming a refund of tax of 2 million Baht or more in a tax year, collaborating with others to create false transactions or conceal income or assets for the purpose of tax evasion or tax refund fraud
** As amended by the Revenue Code Amendment Act (No 45) gazetted on 01 April 2017.
Whilst these provisions strike down tax evasion and 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 provisions have potential application, yes, but the practice in Thailand is to, instead, issue assessments for unpaid tax with penalties and surcharge for unintentional avoidance. See our Tax Penalties and Surcharge Tax Insight for the rates of penalties and surcharge in Thailand.
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.