Thailand –  Tax Evasion and tax fraud, new cases of money laundering offences

The Thai Government has established new punishment for tax evaders and fraudulent taxpayers by enacting the Revenue Code Amendment Act (No.45) B.E. 2560. Accordingly, a person who commits tax evasion and/or tax fraud as well as fraudulent tax refund application shall be regarded as committing a serious offense effective since 2^nd of April 2017.

Tax Evasion purpose is for taxpayers to deliberately misrepresent the true state of their affairs to tax authorities in order to reduce their tax liability with dishonest tax reporting, such as declaring less income, profits or gains than the amounts actually earned, or overstating deductions. Tax Fraud occurs when an individual or business entity willfully and intentionally falsifies information on a tax return in order to limit the amount of tax liability.

The definition of serious tax crime as a predicate offence under the Prevention and Suppression of Money Laundering Law consists as follows:

1. Committing an offence under Section 37, Section 37 Bis and Section 90/4 of the Revenue Code;
2. Committing tax evasion, tax fraud over 10 million baht or requesting tax refund by false information, fraud, artifice, or other similar nature for 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.

As a consequence, the Revenue Department shall be entitled to send all data to the Anti-Money Laundering Office to proceed according to the law.

By Alexandre Dupont, Orbis Thailand Partner.