On 26 March 2019, the Act on Waiver of Penalties, Surcharges and Criminal Charges for Encouragement of Tax Compliance under the Revenue Code (“Act”) came into effect to offer a waiver of the penalties and surcharges as well as criminal charges for corporate income tax (“CIT”), value added tax (“VAT”), specific business tax (“SBT”) and stamp duty.

Though the waivers are opened to all, the objective behind the scene is to give the second opportunity to those applied for the first amnesty-like program in 2016 under the Emergency Decree on Exemption and Encouragement of Tax Compliances under the Revenue Code B.E. 2015 (“Decree”), but failed to fulfil certain requirements.

The program is available only to companies with taxable income, derived during the full 12-month accounting year ending on or before 30 September 2018, of not exceeding THB 500 million; provided that they must not be assessed or charged with any criminal offence involving a tax invoice, before 26 March 2019.

The Act does not waive the payments of the shortfall taxes. Criminal charges to be waived are limited to those normally imposed on the failure to file tax returns and exclude other types of criminal offenses, e.g. tax evasions and issuance or utilization of fake tax invoices.

Interested company must register for the waiver via the Revenue Department’s website and file the following tax returns together with the payments within 30 June 2019:

• CIT for the accounting year starting on or after 1 January 2016 to 31 December 2017;
• VAT/SBT for tax months of January 2016 until February 2019;
• Stamp duty (limited to those required to be paid in cash) for documents made during 1 January 2016 to 25 March 2019; and
• Taxes that are required to be collected and remitted to the Revenue Department (e.g. withholding tax and reverse-charge VAT) for transactions that took place during 1 January 2016 to 25 March 2019.

The Act itself does not protect the applicants from the penalties, surcharges and criminal charges resulting from the shortfall taxes occurred before 1 January 2016 unless they have already applied for first amnesty-like program in 2016.

To maintain the eligibility of this program, the applicants are strictly required to submit all tax returns through the e-filing system during 1 July 2019 to 30 June 2020 with correct information and tax payment. The violation of this could lead to the complete revocation of the waiver.

By Prof. Piphob Veraphong and Rachanee Prasongprasit

(as at 31March 2019)