Tax Newsletter NOVEMBER 2021

DLO’S Tax Newsletter

Issue 124 November 2021

Tax Law Update
1. Income Tax exemption for compensation received from the government for the official and third party who works relating to the pandemic of the Coronavirus Disease 2019
2. Regulation regarding documents or evidence showing the necessary information for the analysis of the terms of transactions between related companies or juristic partnerships
3. Regulation regarding the rules, procedures, and conditions for Income Tax and VAT exemption for a donation made to the Office of the Permanent Secretary, the Prime Minister’s Office to support resolving the Coronavirus Disease 2019
4. Regulation for a person who files a return to notify information according to the Country-by-Country Report
5. Stipulating the additional charitable organizations or institutions or medical institutions and educational institutions which are charitable organizations or institutions or medical institutions and educational institutions under Section 47 (7) (b) of the Revenue Code

Interesting Supreme Court Judgment
Deka (Supreme Court Judgement) No. 1436/2563
Between     Rayong’s prosecutor                    Plaintiff; and
          Raiwin Maintenance & Service Co.,Ltd. Et. al     Defendant
Issue:      the using of false tax invoices

Tax Law Update

1. Income Tax exemption for compensation received from the government for the official and third party who works relating to the pandemic of the Coronavirus Disease 2019

Ministerial Regulations No. 378 (B.E. 2564) provides an Income Tax exemption for compensation received from the government for the official and third party who works relating to the pandemic of the Coronavirus Disease 2019 in the tax year 2021.

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

For more details, please see: https://bit.ly/31sHqKn

2. Regulation regarding documents or evidence showing the necessary information for the analysis of the terms of transactions between related companies or juristic partnerships

Notification of the Director-General of the Revenue Department on Income Tax (No. 407) prescribed the regulation regarding the documents and evidence showing the necessary information for the analysis of the terms of the transaction between related companies or juristic partnerships. This Notification shall be effective for the income of companies or juristic partnerships whose accounting periods commencing on or after 1 January 2021 onwards.

To be eligible, 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/3BKwBzz

3. Regulation regarding the rules, procedures, and conditions for Income Tax and VAT exemption for a donation made to the Office of the Permanent Secretary, the Prime Minister’s Office to support resolving the Coronavirus Disease 2019

Notification of the Director-General of the Revenue Department (No. 36) prescribed that a donation made to the Office of the Permanent Secretary, the Prime Minister’s Office to support resolving the Coronavirus Disease 2019 are exempted for PIT, CIT or VAT, as the case may be. A taxpayer who wishes to exercise the tax exemption does not have to present the evidence of a donation to a tax assessment officer.

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/3jX4es0

4. Regulation for a person who files a return to notify information according to the Country-by-Country Report

Notification of the Director-General of the Revenue Department on Income Tax (No. 408) prescribed that the related companies or juristic partnerships under the Notification are obligated to submit Country-by-Country Report together with P.N.D.50 to a tax assessment officer. This Notification shall be effective for a report of the accounting period commencing on or after 1 January 2021 onwards.

To be eligible, 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/3bBeqll

5. Stipulating the additional charitable organizations or institutions or medical institutions and educational institutions which are charitable organizations or institutions or medical institutions and educational institutions under Section 47 (7) (b) of the Revenue Code

Notification of the Ministerial of finance on Income Tax and VAT (No. 777-779) has amended the “Foundation for the Welfare of Psychiatric Patients, Suan Prung Hospital” to “Suanprung Hospital Mental Health Foundation” and add “Somdej Phra Naresuan the Great Foundation for Education for Children and Youth Phitsanulok” and “Praboromarajchanok Institute Foundation” as charitable organizations or institutions under Section 47 (7) (b) of the Revenue Code.

To be eligible, 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/3CVlfKR (No. 777)
https://bit.ly/3waXonG (No. 778)
https://bit.ly/3bEN0v3 (No. 779)

Interesting Supreme Court Judgment
Deka (Supreme Court Judgement) No. 1436/2563
Between     Rayong’s prosecutor                    Plaintiff; and
          Raiwin Maintenance & Service Co.,Ltd. Et. al     Defendant
Issue:      the using of false tax invoices

Issue to consider : Whether punishing the defendants in both civil and criminal for using false tax invoices is deemed as punishing the defendants more than once.

Fact : Both defendants used tax invoices issued by companies that do not actually operate and are not eligible to issue tax invoices as tax credits in the filed VAT returns (Por.Por.30) from the tax month of January to May 2009 and from the tax month of July to December 2009. Therefore, Rayong Area Revenue Officer 2 assessed fines, surcharges, and criminal penalties against the defendants. The defendants disagreed with the assessment and filed a lawsuit in court. Subsequently, the Court of First Instance sentenced the 1st defendant to a fine of 11,000 baht and the 2nd defendant to 16 months and 15 days of imprisonment.

Both defendants petitioned that the defendants had paid fines and surcharges according to the assessment of the Revenue Department, Muang Rayong Branch 2. The court shall not punish both defendants with criminal penalties, which are deemed as punishing the defendants more than once.

Summary of Judgment : The Supreme Court held that the actions of the two defendants are using false tax invoices or unlawfully issued tax invoices for the purpose of tax credits in filing VAT returns (Por.Por.30), in which the provisions of the Revenue Code prescribe that the person who uses false tax invoices shall be liable to civil liability by paying fines and surcharges under Sections 89 (7) and 89/1 and criminal liability under Section 90/4 (7) the Revenue Code. Therefore, even both defendants paid fines and surcharges, which is a civil liability, both defendants are liable to criminal liability because each liability is separated and it is not deemed as punishing the defendants more than once. The defendant’s petition is untenable.

Legal opinion : The author agrees with the judgment of the Supreme Court because the Revenue Code clearly stipulates both civil and criminal liabilities separated from each other. The claim made by the defendants that they had paid the fines and surcharges, the court shall not be able to punish the defendants for any further criminal liability because it is deemed as punishing the defendants more than once, is the claim that referred to the Criminal Law principle “no multiple punishments for the same action”, which originated from the Latin proverb “Non bis in idem”. However, the facts show that the defendants were not convicted of penalties twice for the same action, but they received both civil and criminal penalties. The case does not constitute multiple punishment as the defendants claimed.

As the mentioned above reasons, the court’s decision to sentenced the two defendants to pay fines and surcharges, with the 1st defendant to pay a fine, and the 2nd defendant to imprisonment, is a righteous sentence.

Author : Miss Prow Phuechmongkol
Translator : Sakawbun Kunsuk

If you have any further questions relating to Tax Law, please contact
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Email : prowp@dlo.co.th