On 3 June 2020, Thailand became the 137th jurisdiction that signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, or the so-called “MAC”, a convention developed jointly by the Organization for Economic Co-operation and Development (OECD) and the Council of Europe, with objective to enable the signing jurisdictions to combat international tax evasion and avoidance.
MAC contours the exchange of information to enhance efficiency of the tax collection via a variety of methods, whichม among other thingsม include the Exchange of Information on Request (EOIR) and the Automatic exchange of information (AEOI).
For example, a Country-by-Country (CbC) Report involving the exchange of information on multinational enterprises (MNEs) and their transactions – which is pending the signing of the Multilateral Competent Authority Agreement on the Exchange of CbC Reports (CbC MCAA) required under Article 6 of MAC in determining the scope of the information and relevant procedures as well as the amendment of domestic law to empower the Director-General of Revenue Department to exchange the information on taxpayers. The public hearing for a draft legislation to implement CbC Report was finished in April 2020. The Thai government plans to apply the CbC Report to the MNEs, with the total group revenues of not less than THB 28 billion.
MAC extends the information exchange network of the Revenue Department from 61 jurisdictions under the existing bilateral tax treaties, to 137 jurisdictions (as at 3 June 2020). It is applicable, not only to income tax, but also indirect taxes such as excise tax and value added tax (except for customs duty). Thus, the MAC will become one of the most powerful means of the Revenue Department to increase its tax collection efficiency.