What You Should Know About How Your Income Tax are being Tracked in Thailand 您應該了解泰國如何追踪您的所得稅
When living and working in Thailand, one of the duties is to report personal income tax. Many tax authorities, including Thailand, are facing particular types of tax evasion and fraud, and finding tools to handle and prevent this type of incident.
According to Thai Revenue Code, Thai tax authorities have the power to access any places, or vehicles to search, seize, or attach documents, or any evidence, or to issue a summons call to a taxpayer, and/or a witness and request for relevant accounts, documents, or any evidence under certain situations, on a person whose tax authorities has reasonable doubt that such person is committing tax fraud/evasion or on any person reports false or incomplete tax returns. Even though Thai tax Authorities could not obtain relevant documents or information directly from those parties, Thai tax authorities, within its authorities and power given by law, have right to summon any information and documents relating to financial transactions and tax payments both from domestic and foreign sources in a normal situation.
Following are sources where Thai tax authorities use to access personal information to make taxpayer comply with the regulations and requirements.
A. Self-Declaration System
It is one of the primary ways where the authorities use to collect information of taxpayer. Taxpayer must submit tax return by self-assessment of his/her own tax liability along with supporting documents. Relevant information should be indicated in the tax return for tax calculation purpose.
B. Withholding Tax System
When a registered taxpayer pays income to a receiver and remits withholding tax to the Thai Revenue Department, the authorities can track the receiver’s income tax and balance the tax calculations, which include an amount paid by the taxpayer.
C. Information Exchange Mechanism
Ø E-Payment Transaction
Since 2019, Thai Revenue Department has requested financial institutes and e-payment service providers to report the specific account transactions of all clients annually, which include the total amount and times of the transaction to support the authorities’ tracking and analysis of significant financial transactions.
The transactions that need to be reported are following; 1.) deposits or receipts of money with more than 3,000 transactions of all owned accounts, per annum, 2.) deposits or receipts of money transfers of all owned accounts with at least 400 transactions with a total value of more than 2,000,000 Baht per annual.
Ø Exchange of Information under the Double Tax Agreement (DTA)
Thai tax authorities may request information on Thai taxpayer’s financial transactions incurred in foreign countries through the power of DTA. Currently, Thai government has entered into DTAs with about 61 countries, so Thai tax authorities are able to receive information from these contracting countries to assess, collect, and enforce relevant taxes.
Ø Foreign Account Tax Compliance Act (TACTA)
Thai tax authorities may request Thai taxpayers’ financial account information from the U.S. and the government of Thailand to implement FATCA (the “Agreement”).
The Agreement mandates the U.S. and Thai governments to obtain and exchange information on certain accounts annually. U.S. financial institute shall collect financial account information of an account holder who is a Thai resident whose account value is more than USD50,000 for individuals or USD250,000 for entities. The collected information includes name, address, the gross amount of interest paid on an account, gross amount of US source dividends paid or credited to the account, and name of the U.S. financial institutes.
Ø Common Reporting Standard (CRS)
In the upcoming drafts, the system that Thai tax authorities will use for the purpose of Tax collection is CRS, which is a new global reporting regime for financial institutes developed based on the automatic exchange requirement of the information under Multilateral Convention on Mutual Administrative Assistance in Tax Matters (MAC). The MAC is developed both by the Origination for Economic Cooperation and Development (OECD) and the Council of Europe, with the main purpose to tackle and eliminate tax evasion and avoidance on a global scale.
在即將到來草擬的法案中，泰國稅務機關為徵稅目的將採用CRS。CRS 是基於多邊稅務行政互助公約 (MAC) 下的資訊自動交換要求而開發的針對金融機構的新的全球報告體系。 MAC 由經濟合作與發展組織 (OECD) 和歐洲委員會共同製定，主要目的在解決及消滅全球範圍內的逃稅和避稅問題。
It requires financial institutes in each member country to gather and to report account information of their customers and report such information to the competent authorities in their countries. The competent authorities shall have power to exchange information such as name, address, taxpayer identification number account number, account balance, and amounts paid into the account amongst the member state.
Recently, the Thai government is drafting the bill, acting as a new addition to the Thai Revenue Code to implement the CRS and activate automatic exchange by September 2023. When such law is enforced, Thai tax authorities will be able to request financial account information of the subjected individuals/entities from the competent authorities of each member country.
近期，泰國政府正在起草《泰國稅法》額外的法案以便在2023年9 月之前實施CRS 並激活自動交換。當法律實施後，泰國稅務機關將能夠向各成員國的主管當局索取個人/企業的金融帳戶資訊。
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