Tax Newsletter AUGUST 2021

DLO’S Tax Newsletter

Issue 121 August 2564

Tax Law Update
1. Income Tax & value-add tax (“VAT”) exemption for a donation to National Vaccine Institute.
2. Extension of income tax & VAT exemption for importing COVID-19 prevention products for donations.
3. Tax measures to support a transfer of collateral assets for debt repayment.
4. Improvement on the criteria to write off bad debts from receivable account

Tax News
1. Stipulating the criteria for a refund of withholding tax from interest through Electronic Withholding Tax systems

Interesting Deka
Deka (Supreme Court Judgement) No. 8376/2563
Between     Company Wor         Plaintiff
          Customs Department     Defendant
Issue: Power to sue in case the plaintiff appeal against the assessment of import duty and value added tax separately

Tax Law update

1. Income Tax & VAT exemption for a donation to National Vaccine Institute.

     The Royal Decree (No. 719) B.E. 2564 granting a Personal Income Tax (“PIT”) and Corporate Income Tax (“CIT”) exemption for a donation made in cash through electronics donation system and VAT exemption for product donations to the National Vaccine Institute for donations made on 1 January 2021 to 31 December 2023.

     To be eligible for this exemption, a taxpayer must comply with the rules, procedures, and conditions prescribed by the Director-General of the Revenue Department.

     For more details, please see: https://bit.ly/3wSKt8y and https://bit.ly/3l83TUC

2. Extension of income tax & VAT exemption for importing COVID-19 prevention products for donation.

     Royal Decree (No. 720) B.E. 2564 provides a CIT and VAT exemption to the companies and juristic partnerships on imported goods for treatment, diagnosis, or prevention of COVID-19 to donate to the listed hospital. The exemption is applicable to the import and donation made from 1 March 2021 to 31 March 2022 and the costs of those products shall not be deducted as an expense in the CIT calculation.

     To be eligible for this exemption, a taxpayer must comply with the rules, procedures, and conditions prescribed by the Director-General of the Revenue Department.

     For more details, please see: https://bit.ly/2UqT4Cb and https://bit.ly/3xROrQ3

3. Tax measures to support a transfer of collateral assets for debt repayment.

     Royal Decree (No. 721) B.E. 2564 provides a PIT and a CIT exemption to financial institution debtors on income receiving from releasing of debt from a financial institution and provides a VAT, a special business tax, and a stamp duty exemption to debtors of financial institutions and financial institutions on income received from the transfer of ownership, sales of goods and instrument execute in connection with the transfer of collateral assets to pay debts.

     To be eligible for this exemption, a taxpayer must comply with the rules, procedures, and conditions prescribed by the Director-General of the Revenue Department.

     For more details, please see: https://bit.ly/3rlJuwD and https://bit.ly/3xLF2cS

4. Improvement on the criteria to write off bad debts from receivable account

     Ministerial Regulation No. 375 (B.E. 2564) inserts Clause 6 Tredecim in the Ministerial Regulation No. 186 (B.E. 2534), prescribing the requirement of the disposal of bad debts from the accounts receivable of the financial institution that has been released to debtors in accordance with tax measures to support the transfer of collateral assets to pay debts can be done without having to proceed in accordance within Clause 4, Clause 5 and Clause 6 of the Ministerial Regulation No. 186 (B.E. 2534)

     For more details, please see: https://bit.ly/36Iy3p5

Tax News

1. Stipulating the criteria for a refund of withholding tax from interest through Electronic Withholding Tax systems

     On 13 July 2546, the Cabinet passed a resolution giving in principle approval to the criteria, methods, and conditions to file a refund of withholding tax for interest from savings bonds issued by the Ministry of Finance through the electronics system of financial institutions.

     To be eligible for this exemption, a taxpayer must comply with the rules, procedures, and conditions prescribed by the laws.

     For more details, please see: https://bit.ly/36W6vNj

Interesting Deka
Deka (Supreme Court Judgement) No. 8376/2563
Between     Company Wor         Plaintiff
          Customs Department     Defendant
Issue: Power to sue in case the plaintiff appeal against the assessment of import duty and VAT separately
Issue to consider : Whether Company Wor has the power to sue for a revocation of the VAT assessment
Fact : Company Wor imported automatic sliding storage device controlled by the computer by declared the tariff schedule 8479.890, customs duty rate 1 percent (Reduction of Custom Duty rate under the Notification of Ministerial of Finance regarding the Reduction of Custom rate and Exemption of Custom Duty under Section 12 of the Customs Tariff Decree B.E. 2530 (No.12) dated 11 December 2003). However, the customs department notified the assessment that those goods are in the tariff schedule 9403.20, customs duty rate 20 percent. Company Wor then filed an appeal against import custom duty to the Appeal Tribunal of Customs Department and filed an appeal against the assessment of VAT to the Appeal Tribunal of Revenue Department. The defendant considered the matters and grants its decision to Company Wor. Thereafter, Company Wor filed a lawsuit to the court requesting the revocation of the defendant’s assessment notification and appellate decision in respect of import duties and VAT.

Judgment of the Supreme Court: Once Company Wor filed an appeal against the VAT assessment, and such appeal was in the process, the filed appeal was thus under the power of the Appeal Tribunal of Revenue Department to grants its decision. Company Wor may not advance to file a lawsuit for the revocation of the VAT assessment.

Legal Opinion : The author agrees with the judgment of the Supreme Court. According to Section 7 (1) and Section 8 of the Act of Establishment of and Procedure for Tax Court B.E. 2528, Company Wor shall appeal against the assessment within the period of the prescribed rules and receive the decision of such Appeal Tribunal before bringing the case to the court. It is thereof the process of law. Hence, the VAT assessment was under the process of the Appeal Tribunal of Revenue Department, the appeal is thus yet to be decided. Company Wor may not skip the procedure to file a lawsuit to Central Tax court because there is no law giving the power to do so. The plaintiff has no power to sue in respect of VAT until an appeal decision of the Revenue Department’s Appeal Committee has been received.

     The problem with the power to file a lawsuit in Tax Court reflects that there are still many entrepreneurs who do not know that the filing of an appeal against an assessment of Custom Duty and VAT can be jointly filed to the Customs Department at one go, by submitting an original and a copy of an appeal under Form Kor Sor Kor. 171 within 30 days from the date of receiving the assessment notification for the Appeal Tribunals of Customs Department and Revenue Department to decide on such matters at the same time. Consequently, the entrepreneurs can file the case to Tax Court to request the revocation or amendment of the appraisal and appellate rulings, both for customs duty and VAT at the same time, according to Notification of Customs Department No. 189/2560 dated 29 December 2560.

     However, in respect of Excise Tax, the entrepreneurs shall file an appeal against Excise Tax assessment with an appeal form (Or Sor. 1) at an Excise Area Office, an Excise Regional Office, or an Excise Legal Office only. The appeal cannot be filed jointly at the Customs Department according to the Notification of the Department of Excise regarding the Measure and Procedure of Appeal and Assessment of Excise Tax B.E. 2560 16 September 2560.

Author: Wannipa Sa-nguanrat
Translator: Itthi Greigarn

Should you require any legal advice on Thai tax law then please contact us at
Dharmniti Law Office Co., Ltd.
2/2 Bhakdi Building 2nd Floor, Witthayu Road, Lumphini, Pathumwan, Bangkok 10330.
Tel: 0-2680-9751, 0-2680-9725
Email: wannipas@dlo.co.th