Tax evasion and tax fraud over 10 million baht are serious money laundering offences
Since Thailand is a member of Asia Pacific Group on Money Laundering (APG), it is necessary to comply with the guidance of Financial Action Task Force (FATF) in defining a serious tax crime as a predicate offence under the Prevention and Suppression of Money Laundering Law, which consists of the following components:
1. Committing an offence under Section 37, Section 37 Bis and Section 90/4 of the Revenue Code (providing false information and intentionally avoid tax) and
2. Committing tax evasion, tax fraud over 10 million baht or requesting tax refund by false information, fraud, artifice, or other similar nature more than 2 million baht;
3. Collaborating with accomplices or connections by creating false business transaction or hidden income to commit tax evasion and tax fraud and;
4. Covering or concealing the origin of assets connected with the offence in order to prevent those assets tracing.
The above-mentioned components will be considered as a predicate offence under the Prevention and Suppression of Money Laundering Law. As a consequence, the Revenue Department shall send all data to the Anti-Money Laundering Office to proceed according to laws.”
Some Civil and Commercial Code under consideration to be amended
In order to improve the ease of doing business in Thailand, the National Council of Peace and Order has issued a directive 21/2560 to amend selected Article in the Civil and Commercial Code and, currently, DBD is considering the amendments. Below are some of the amendments that shall be proposed:
Article 1016: Company registration or registration of amendments can be registered in jurisdiction other than where the head office is located.
Article 1020/1: Minister of Commerce can issue Ministerial Regulation to reduce or exempt government fees such as copy and certify document fees or any fees related to company
Article 1108 (1): Article of Association may include procedure to resolve conflict between directors and shareholders
Article 1237 (5): The Court can order company to liquidate in the case that the conflict in the company cannot be resolved and business cannot be continued.
Article 1128, Paragraph 1: All share certificates shall be signed by at least 1 director (to accommodate that some company may choose not to have company seal)
Article 1201, Paragraph 4: Dividend shall be paid within one month from the date of Annual General Shareholders’ Meeting or the date approved by the Board of Directors
To install new technology to the car without charging fee
Q: A foreign company registered in Thailand has registered capital of Baht 205 million and operates the wholesale and retail businesses, in order to sell a car brand named “….” without having to obtain the Foreign Business license. The company plans to install and provide the new technology to the cars which does not require additional payment, and customers cannot modify or adjust this new technology. The company would like to confirm whether it will need to obtain the Foreign Business License to operate such technology-related business or not.
A: 1) Selling cars to customers in Thailand, the company is considered as doing retail business under List three (14) or wholesale business under List three (15) of the Foreign Business Act B.E. 2542 and will require approval of Foreign Business License prior to operation. However, if the foreigner will operate the businesses without having to obtain the Foreign Business License, then the foreigner is required to have the actual capital which is the fully paid-up capital of Baht 100 million for each business, excluding minimum capital as required by Foreign Business Act B.E.2542 or other laws.
2) In case the company sells the cars and installs technology without charging additional installation fee, this activity is considered as a part of the car sales and such activity will not be subjected to the trading business under Section 4 of the Foreign Business Act B.E. 2542, so the Foreign Business License will not be required.
3) In case the company charges the service fee for technology installation and usage fees, it shall be considered as doing the trading business according to section 4 of the Foreign Business Act B.E. 2542 and also doing business according to Annexed List 3 of the Foreign Business Act which must receive approval of the Foreign Business License prior to operation.