Stop using tax havens firms told

[BahtandSold]

REVENUE DEPT
Firms told to stop using tax havens
source: The Nation

Pledge to prosecute consulting companies

The Revenue Department has warned large and medium-sized companies to stop evading taxes after finding many Thai firms transferring profits to offshore tax havens.

Deputy director-general Satit Rangkasiri said many large and medium-sized corporations had used services offered by tax-haven countries to "doctor" their books or inaccurately declare taxable income.

For example, one exporter's products had a price of Bt140 apiece, but he exported to a tax-haven country and declared a product price of only Bt100 apiece.

The tax-haven country then sold the products to destination countries for Bt140 without tax payment. Thailand was only able to collect tax on the Bt100 sale instead of Bt140, and the country lost tax revenues as a result.

"This violates tax laws. The Revenue Department must be able to collect tax based on actual earnings," Satit warned.

He said the department had identified a number of consulting firms that advised Thai companies to set up businesses in tax-haven countries to circumvent Thai tax laws.

The department will take legal action against the consulting companies and closely monitor the setting up of business units in tax havens in the belief that the move is being made to avoid paying tax.

The Revenue Department's move comes after the government's decision to go ahead with legal action against the family of deposed prime minister Thaksin Shinawatra, accusing Thaksin and his family of tax evasion and corruption. Thaksin is accused of setting up the company Ample Rich in the Virgin Islands, a well-known tax haven, to facilitate the transfer of shares in Shin Corp.
_________________
.


www.BahtSold.com
Connecting People · Connecting Thailand

[BahtandSold]

Crackdown begins on firms involved in offshore tax havens
source: Bkk Post

Thailand's tax officials are cracking down on exporters and tax advisers involved in evading taxes through offshore accounts and subsidiaries said the Revenue Department.

Satit Rungkasiri, the Revenue Department's deputy director-general, said tax officials were closely monitoring exporters suspected of siphoning profits through ''tax haven countries''.

Officials are also watching tax advisers who encourage or facilitate tax evasion practices.

Offshore destinations such as the British Virgin Islands and the Cayman Islands are notorious for lax disclosure standards and their role as conduits for dubious financial transactions.

Local tax officials say that medium- and large-sized exporters manipulate their revenues through tax havens to reduce taxable income.

One common method would be to mask actual export revenues by selling goods from Thailand to a unit located in a tax haven below the market value.

The product is then reshipped from the tax haven to the final customer at a higher price, while the Thai exporter only declares the artificially low price as his revenue.

Mr Satit said such practices were against the Thai tax code and would be subject to penalties if discovered. Tax officials also have the authority to assess higher tax payments on exporters found to be manipulating their income streams.

''Recently we've seen a number of consultants emerge in the market offering advise and assistance for Thai companies to establish subsidiaries in offshore tax havens, usually to facilitate inappropriate businesses and transactions,'' he said.

''The Revenue Department is preparing to crack down on the practice _ both on the companies involved and their advisers.''

Tax officials said they were monitoring closely the activities of four large business and tax consultancies and another two smaller firms that assist Thai companies in setting up offshore tax vehicles.

Authorities are also increasing their scrutiny of the practice of transfer pricing, where transactions between domestic and offshore related companies are manipulated to minimise the tax burden.

While offshore tax havens have long been used in the financial sector to facilitate fund-raising activities, their practice has come under increased scrutiny over the past several years.

The discovery that former prime minister Thaksin Shinawatra had used offshore vehicles to transfer shares in listed companies to his offspring is the most recent example.
_________________
.


www.BahtSold.com
Connecting People · Connecting Thailand