Tax loopholes closing on transfers of assets and profits
THE Cabinet yesterday approved a draft bill aimed at preventing the transfer of assets and profits for the purpose of avoiding tax liabilities.
Also approved yesterday were proposals requiring that juristic persons with interconnected transactions of more than Bt30 million a year send the authorities a clarification report and a tax waiver that will benefit foreign disabled people who earn no more than Bt190,000 a year.
Nattaporn Jatusripitak, a spokesman for the Deputy Prime Minister for Economics, said that the Cabinet also agreed on a draft bill for an amendment to the transfer pricing law.
The draft bill requires that companies or registered partnerships that have relationships must prepare reports that disclose the details of these relationship as well as the interconnected transactions in each accounting period as determined by the Revenue Department’s director-general. The reports must be delivered as scheduled.
An authorised appraiser may file a report involving analysis of reported transactions to the companies or registered partnerships within five years.
These corporations will be fined no more than Bt200,000 if they do not deliver the reports as scheduled or submit incomplete reports, documentation or other key evidence. Those with interconnected transactions of no more than Bt30 million per year will be exempt from the reporting.
“The amendment to this legislation aims to prevent the transfer of assets and profits to an enterprise with less income or the transfer of assets overseas, or so-called transfer pricing for tax avoidance.
Asset transfers for tax avoidance is called the use of tax havens. This move is in line with international principles, as has been done in other countries, does not affect investments in Thailand,” Nattaporn said.
The exemption of personal income tax for foreign disabled people aged no more than 65 on annual income of no more than Bt190,000 had been proposed by the Ministry of Finance (MOF).
This move came after a complaint from National Human Rights Commission of Thailand to the MOF.
According to the MOF, this measure applies the same principles of its 1966 ministerial regulation proposing an exemption for Thai disabled persons aged no more than 65 old on annual income of no more than Bt190,000.
The Cabinet yesterday also approved the second phase development of a Pracha Rath housing project for 2,757 residential units on 317 rai of plots held by the Treasury Department.
Some 618 residential units will be developed in Mae Tha district of Lampang, 584 units in Mueang district of Chiang Mai, 352 units in Mueang district of Chiang Rai, 322 units in Mueang district of Nakhon Phanom, 292 units in Mueang district of Khon Kaen, 264 units in Mueang district of Udon Thani, and 186 residential units in Sattahip district of Chonburi. The remaining 139 units will be developed in Hua Hin district of Prachuap Khiri Khan.
