1. “Effective Tax Planning and Compliance in Treasury Management”
Prepared by Picharn Sukparangsee
at the Conference on “Integrated Financial Risk Management”
arranged by
the Asia Business Forum
on September 7-8, at the Land Mark, Bangkok

2. Effective Tax Planning and Compliance in Treasury Management
TREASURY DUTIES WITH REGARD TO
TAX PLANNING AND COMPLIANCE I.
LATEST UPDATES ON RELATED TAX
AND COMPLIANCE
II.
HOW TO REVISE TREASURY TRANSACTIONS
FOR MORE FAVOURABLE TAX SAVINGS
III.
EFFECTIVE PRACTICES TO
ENHANCE TAX COMPLIANCE
IV.
HOW TO MEASURE AND IMPROVE THE
EFFECTIVENESS OF TAX PLANNING AND
COMPLIANCE IN THE CURRENT TIME V.

3. TREASURY DUTIES WITH REGARD TO
TAX PLANNING AND COMPLIANCE I.

4. Understand basic principles of taxation law.
I. TREASURY DUTIES WITH REGARD TO
TAX PLANNING AND COMPLIANCE
Understand basic principles of taxation law.
Review transactions and structure of a company for tax efficiency
Regularly update important tax rules, regulations , cases and rulings
Principles of taxation
Equality of taxation
Certainty of taxation
Fairness
Efficiency

5. 1. Tax policies should be less complex.
I. TREASURY DUTIES WITH REGARD TO
TAX PLANNING AND COMPLIANCE
Ideal tax policies
1. Tax policies should be less complex.
2. Tax policies should be simple and certain.
3. Structure and provisions of taxation law should be straightforward, unambiguous, consistent and coherent.
the rules of the tax structure should be clear, reliable and foreseeable.
In reality, tax laws and regulations become increasing complicated and highly difficult for ordinary people to understand.

6. Revenue Code of Thailand Personal income tax
I. TREASURY DUTIES WITH REGARD TO
TAX PLANNING AND COMPLIANCE
Revenue Code of Thailand
Personal income tax
source doctrine and resident doctrine
total income
expenses and allowances
new tax exemptions or reductions
Corporate income tax
recognition of revenues and expenses on accrual basis
requirements for computation of net profits or losses
expenses prohibited for computation of the net profits

7. Capital gain tax is part of income tax under Thai taxation law.
I. TREASURY DUTIES WITH REGARD TO
TAX PLANNING AND COMPLIANCE
Thai income tax law is based upon the worldwide income basis, not territorial basis.
Personal income tax is chargeable on a source basis and a resident basis.
Corporate income tax is collectible on the principle of incorporation and the principle of doing business in a jurisdiction.
Capital gain tax is part of income tax under Thai taxation law.

8. sale of goods, provision of service import of goods and service
I. TREASURY DUTIES WITH REGARD TO
TAX PLANNING AND COMPLIANCE
Value added tax
sale of goods, provision of service
import of goods and service
export of good and services
Specific business tax
specific businesses such as banking, insurance and real estate businesses
Stamp duties
Instruments

9. Double taxation agreements between Thailand and its counterparties
I. TREASURY DUTIES WITH REGARD TO
TAX PLANNING AND COMPLIANCE
Double taxation agreements between Thailand and its counterparties
cover only income tax and petroleum tax, not value added tax and specific business tax
Benefit to residents of the contacting states only
allocation of income and capital gains
Specific income and other income
Relief from double taxation- exemption method and credit method
Exchange of information

10. Exemption, a waiver or reduction of tax should be looked at.
I. TREASURY DUTIES WITH REGARD TO
TAX PLANNING AND COMPLIANCE
Important issues
Exemption, a waiver or reduction of tax should be looked at.
Corporate structure should be tax efficient.
More companies will have more expenses for computation of the corporate income tax.
Corporate shareholding should be compared with individual shareholding.
Contents of agreements should be reviewed to have proper tax benefits.
Tax managers of a large company should be employed to take care of tax matters.
Unilateral tax relief is useful for corporate shareholding in a foreign country.
Overseas transactions should take into consideration the tax issues.

11. Forms of doing business and tax liabilities 1. Subsidiary 2. Branch
I. TREASURY DUTIES WITH REGARD TO
TAX PLANNING AND COMPLIANCE
Forms of doing business and tax liabilities
1. Subsidiary
2. Branch
3. Agency
4. Distributorship

12. A subsidiary is separated from its parent company.
I. TREASURY DUTIES WITH REGARD TO
TAX PLANNING AND COMPLIANCE
Subsidiary
A subsidiary is separated from its parent company.
A subsidiary shall pay corporate income tax on the net profits arising in and out of Thailand.
If the subsidiary pays dividend to its parent company, withholding tax shall be chargeable on the dividend paid by the subsidiary to its parent company.
For VAT, authorized directors of the company shall file an application for registration of VAT and pays VAT.

13. I. TREASURY DUTIES WITH REGARD TO
TAX PLANNING AND COMPLIANCE
Branch
A branch is nor regarded as a separate entity from its head office. The head office and its branch shall be deemed to be the same entity.
The branch shall pay tax on its profits arising from the business operation in Thailand only.
If the branch remits profits to the head office, the profits shall be subject to withholding tax.
An employee or a representative of the branch shall file an application for VAT and pay VAT.

14. Sale Agency or Exclusive Agency
I. TREASURY DUTIES WITH REGARD TO
TAX PLANNING AND COMPLIANCE
Sale Agency or Exclusive Agency
an independent agent shall act as a general agent.
an dependent agent has a different tax implications from an independent agent.

15. An independent agent under the tax ruling of the tax appeal
I. TREASURY DUTIES WITH REGARD TO
TAX PLANNING AND COMPLIANCE
An independent agent under the tax ruling of the tax appeal
committee shall have the following:
1. An agent in Thailand shall act as an agent of companies in foreign countries in general, not act as one company in a foreign country only.
2. no agreement is made between the agent in Thailand and a company in a foreign country which limits the right of the agent to act as the agent of other companies in a foreign country. No practice on limit of the right of the agent occurs.
3. The agent in Thailand receives no other benefits other than the commission for the sale of the goods.
4. The buyer shall directly pay for the goods to the seller.

16. However, an application for temporary trade is allowed.
I. TREASURY DUTIES WITH REGARD TO
TAX PLANNING AND COMPLIANCE
VAT
If the foreign seller sells the goods through its agent in Thailand on a temporary basis, no application for registration for VAT is required.
However, an application for temporary trade is allowed.
If the foreign seller sells the goods through its agent in Thailand on a regular basis, an application for registration for VAT is required.

17. 2. Exclusive Distributor
I. TREASURY DUTIES WITH REGARD TO
TAX PLANNING AND COMPLIANCE
Distributor
1. Sale Distributorship
The manufacturer appoints a sale distributor and will not appoint other distributors but reserve the right to make a direct sale in a country.
2. Exclusive Distributor
The manufacturer undertakes that the distribution in a foreign country will be made by an exclusive distributor in that country.
The relationship between the manufacturer and the distributor is a sale agreement and an agency agreement.

18. Distributor Agreement
I. TREASURY DUTIES WITH REGARD TO
TAX PLANNING AND COMPLIANCE
Distributor Agreement
1. The sale agreement between the manufacturer and the distributor
2. The sale agreement between the distributor and the buyer in Thailand.
As a result, the manufacturer in a foreign country has no legal relationship with a buyer in Thailand. Risk on the sale of the goods is with the distributor.
The distributor is not required to file the tax return and pay tax.

19. I. TREASURY DUTIES WITH REGARD TO
TAX PLANNING AND COMPLIANCE
However, in practice, the Revenue Department accepts only the case that the buyer in Thailand pays for the goods to the distributor only. If the buyer in Thailand pays for the goods directly to the Manufacturer in a foreign country, it is deemed by the Revenue Department that the distributor acts as a representative or a go-between of the manufacturer and shall file the tax return and pay tax.
The Supreme Court may agree or disagree with the Revenue Department on the issues in relation to the distributor on a case-by-case basis.

20. LATEST UPDATES ON RELATED TAX
AND COMPLIANCE
II.

21. 1. Payment for equipment for saving of energy
II. LATEST UPDATES ON RELATED TAX AND COMPLIANCE
Tax benefits
1. Payment for equipment for saving of energy
The replacement of the existing equipment for saving of energy of not more than Baht 50 Million for 5 accounting periods
2. Payment of training of employees
Two times of expenses paid.
3. Payment for R&D
Corporate income tax is exempted for income of a company or a partnership equivalent to 100% of expenses paid for R&D to government authorities or a private sector as published in the government gazette.

22. 4. Payment for operation of the project under the BOI
II. LATEST UPDATES ON RELATED TAX AND COMPLIANCE
4. Payment for operation of the project under the BOI
% of payments for transportation, electricity and water supply
4.2 payments for installation or construction of facilities for the operation of the business from profits of not more than 25% of the investment.
5. Payments for support of education
2 times of the payment
6. Payment for support of learning and entertainment
7. Partial Transfer of Business
Tax exemption for the partial transfer of business to be completed within 31 December 2010.

23. ROH (Regional Operating Headquarters)
II. LATEST UPDATES ON RELATED TAX AND COMPLIANCE
ROH (Regional Operating Headquarters)
The new tax incentives for the ROH are set forth below:
1. personal income tax for the income of any foreigner working for the ROH in Thailand is 15% for a period of 8 years.
2. personal income tax for the income of any foreigner working for the ROH outside Thailand is exempted from Thai tax.
3. the profits of the ROH derived from services provided from the ROH to its affiliated companies outside Thailand are exempted from corporate income tax.
4. corporate income tax for income derived from services provided to affiliated companies in Thailand of the ROH is reduced 10% for a period of 15 years.

24. II. LATEST UPDATES ON RELATED TAX AND COMPLIANCE
Issues
1. the difference on preparation of ROH activity/ account and non-ROH activity/account
2. application for investment promotion shall be submitted to the Office of the BOI.
3. the timing of the letter of notification of the use of the tax benefits.
4. VAT of 0% or 7% depends upon the facts whether service is provided to a company outside Thailand and the service is used in Thailand or in a foreign country.

25. The existing Building and Land Act
II. LATEST UPDATES ON RELATED TAX AND COMPLIANCE
Property Tax
A land and building Bill is still under consideration of the Finance Ministry.
The existing Building and Land Act
Only the rental of the land and building is taxable.
The rate of the tax is 12.5 % of the annual rental received.
A Land and Building Bill
The value of the land and the building is taxable regardless of whether the land and the structure can be let.

26. - land for commerce – 0.50% of the value of the property
II. LATEST UPDATES ON RELATED TAX AND COMPLIANCE
Tax rates
- land for commerce – 0.50% of the value of the property
- land for residence – 0.10% of the value of the property
- land for agriculture – 0.05 % of the value of the property
VAT Rate
The reduction of the rate of VAT from 10% to 7% due to expire on 30 September 2010 shall be extended until September 2012.
It should be noted that the Vat reduction has been made since 1999.

27. Tax Rates for listed companies
II. LATEST UPDATES ON RELATED TAX AND COMPLIANCE
Tax Rates for listed companies
At present, the net profits of companies listed on the MAI are subject to 20% corporate income tax. 25% corporate income tax is chargeable on the net profits of companies listed on the SET. It is in the process of consideration whether the tax benefits for companies listed on the MAI and the SET would be extended after 30 September 2010 by the Government.
Reduction for transfer of houses and condominium
The tax incentives for transfer fees of condominium to 0.1% expired on 30 June 2010.

28. II. LATEST UPDATES ON RELATED TAX AND COMPLIANCE
Bad Debts
Disposition of bad debt losses under tax law shall be the debts which the company has recognized as revenue and paid corporate income tax.
Debt Restructuring
A financial institution can have a debt restructuring with its debtor or a guarantor.

29. reduction of interest and other similar acts
II. LATEST UPDATES ON RELATED TAX AND COMPLIANCE
The debt restructuring results in the following which shall be deemed to be a justifiable ground only for the debt restructuring made from 1 January 2010 to 31 December 2010.
reduction of interest and other similar acts
transfer of property or provision of service to the financial institution without any compensation or compensation or service fee lower than the market price
repayment of the principal before payment of interest, fees and service fees
A debtor shall include a guarantee.
A financial institution shall include other creditors.

30. MIS , GIS and tax liability
II. LATEST UPDATES ON RELATED TAX AND COMPLIANCE
MIS , GIS and tax liability
A state enterprise entered into an agreement on Management Information System and Geographic Information System : MIS and GIS with the Academic Service Center of a University.
The University is a juristic person under the Act of 2008 and is not a partnership or a company. The Payment paid by the state enterprise to the Center is not subject to withholding tax.
The Center belongs to a state enterprise under supervision of the University. The University is an operator and shall pay VAT.

31. Withholding tax on Jewelry
II. LATEST UPDATES ON RELATED TAX AND COMPLIANCE
Withholding tax on Jewelry
A person, a group of persons , a partnership or a company making the payment under Section 40(8) for jewelry to an individual taxpayer shall have 1% withholding tax on the payment.
However, the provision shall not apply to the payment for jewelry to an individual who is a buyer for his consumption without any intention to resell it.

32. II. LATEST UPDATES ON RELATED TAX AND COMPLIANCE
Transfer Pricing
Payment for a purchase of goods or provision of services shall be made at the market price.
Audit of the transfer pricing is conducted on a random basis by the Revenue Department.
The revenue Department normally looks at the transfer of revenues from an affiliated company in Thailand to its parent company in a foreign country.
If affiliated companies charge compensation between related transactions at the price lower than the market price, the Revenue Department is empowered to assess the revenue of affiliated companies.

33. Examples on the transfer pricing
II. LATEST UPDATES ON RELATED TAX AND COMPLIANCE
Examples on the transfer pricing
net profits of a subsidiary in Thailand in the present tax year is lower than that in the previous tax year.
profits of a subsidiary is transferred in a form of royalty or management fees, advisory fees, or service fees to its parent company

34. II. LATEST UPDATES ON RELATED TAX AND COMPLIANCE
Compliance with the transfer pricing regulations
Comparable Uncontrolled Price Methods (CUP)
Resale Price Method (RPM)
Cost Plus Method (CPM)
Other methods
4.1 Profit Split Method; and
4.2 Transactional Net Margin Method
Advance Pricing Agreement or the APA can be made with the Revenue Department.

35. Payment of front-end fee
II. LATEST UPDATES ON RELATED TAX AND COMPLIANCE
Payment of front-end fee
Company A as an operator shall pay the front-end fee and interest to the bank. The payments are expenses of Company A for carrying on its business for profits.
VAT and prohibited tax
A company purchased land and building. Subsequently, the company purchased another land and building and terminated the previous agreement on the purchase of land and building and used the number of the previous building and notified the change later.
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36. II. LATEST UPDATES ON RELATED TAX AND COMPLIANCE
VAT and prohibited tax
It shall be deemed that the Company sold the first land and building and the input VAT from the payment for materials and the payment for the design of the first building is the prohibited input VAT to be deducted from the output VAT.
On the other hand, the company made the payment for materials and the payment for the design of the second building, the payments are deemed to be the input tax which is direct and relevant to the business operation of the Company, as a result, the Company can offset the input VAT from the output VAT.

37. VAT foreign sale and Domestic sale
II. LATEST UPDATES ON RELATED TAX AND COMPLIANCE
"
VAT foreign sale and Domestic sale
In the first case, the Company sells the goods to a foreign customer on the condition that the foreign customer shall receive the goods at the premise of the company in Thailand. The Customer shall proceed with the export invoice in the name of the Company. The Company is entitled to 0% VAT.
In the second case, the Company sells the goods pursuant to the order of the foreign customer. The foreign customer receives the goods in Thailand. It is a sale of goods in Thailand. The Company shall pay 7% VAT.

38. II. LATEST UPDATES ON RELATED TAX AND COMPLIANCE
Guarantee Payment
Company A pays the guarantee to Company B under the joint agreement on payment of the guarantee for the use of gas. Company A shall return half of the guarantee to Company B.
The guarantee is not deemed value of the tax base because the guarantee is made under the joint commercial agreement. Company A has not duty to issue its tax invoice.
The guarantee is nevertheless is regarded as revenue of Company A for the purpose of computation of corporate income tax.

39. The Company purchased land in Chonburi with ore.
II. LATEST UPDATES ON RELATED TAX AND COMPLIANCE
Land and Depreciation
The Company purchased land in Chonburi with ore.
The Company cannot deduct the payment for the purchase of the land as expense.
The Company cannot have depreciation or amortization of the payment for the land.

40. Bank C in foreign country Company A Bank B in Thailand Land
II. LATEST UPDATES ON RELATED TAX AND COMPLIANCE
Interest – Refinance of Domestic Loan by Foreign Loan
Bank C in foreign country
Refinance
Loan
Company A
Bank B in Thailand
Purchase
Land

41. II. LATEST UPDATES ON RELATED TAX AND COMPLIANCE
Company A borrowed money from Bank B in Thailand to purchase land in Thailand. The loan and its interest are regarded as capital expenditure and cannot be deducted as revenue expenses.
Company A thereafter had a refinance from Bank C in a foreign country to repay the domestic loan.
The interest paid by Company A to Bank C is considered to be capital expenditure.

42. VAT Rulings Sale of fresh milk
II. LATEST UPDATES ON RELATED TAX AND COMPLIANCE
VAT Rulings
Sale of fresh milk
The business of sale of fresh milk without mixing of taste, smell and colour is exempted from VAT and input tax arising from a purchase of raw material, equipment and machinery for carrying on the business is a prohibited input tax.

43. II. LATEST UPDATES ON RELATED TAX AND COMPLIANCE
Advisory Business
Company A carries on the advisory business to customers in a foreign country and the result of the work is all used in a foreign country. O % VAT is applied.
Free Zone
A company in a free zone takes cars from the free zone to be kept at the warehouse of the company outside the free zone, the company is regarded as an importer and shall pay VAT on cars and the VAT liability arises on the date on which the cars are taken out of the free zone not for export.

44. Service out of Thailand
II. LATEST UPDATES ON RELATED TAX AND COMPLIANCE
Computer Program
A company sells and installs computer programs to its customers and ownership of the software belongs to the software ownership company. It falls under service, not sale and shall be subject to VAT at the time of the payment.
Service out of Thailand
A company proceeded for repair and addition of a gymnasium located in Laos which falls within service provided out of Thailand. The payment received by the company is not subject to VAT. The company is not required to pay VAT and issue the tax invoice.

45. II. LATEST UPDATES ON RELATED TAX AND COMPLIANCE
Payment for mould delivered in Thailand
A Thai company made the payment for manufacture of the mould to a Chinese company which sent its employees to install the mould, provided advice and had a test run of the mould for 1 or 2 weeks in Thailand, it is deemed that the Chinese company carried on its business in Thailand. If an agreement does not provide for the right to make a copy, to modify and to distribute the use of the mould and for the transfer of technology, the payment is regarded as business profit. If the Chinese company has no permanent establishment in Thailand, the Chinese company is required to pay tax in Thailand.
The payment by the Thai company to the Chinese company was for the service to the Chinese company provided in a foreign country but the service was applied in Thailand, the Thai company shall remit the VAT within 7 days.

46. II. LATEST UPDATES ON RELATED TAX AND COMPLIANCE
Specific Business Tax
If a buyer pays government fee, tax, withholding tax and specific business tax in place of the seller, the seller shall include the fees and the taxes paid by the buyer as the revenue of the seller for computation of corporate income tax in a relevant accounting period.
The fee and the taxes on the sale and purchase of land paid by the buyer in place of the seller are in the nature of investment on the land and are prohibited from being deducted as expenses.

47. BOI – BOI and Non-BOI businesses
II. LATEST UPDATES ON RELATED TAX AND COMPLIANCE
BOI – BOI and Non-BOI businesses
A company with investment promotion from the Board of Investment is entitled to deduct an annual loss of the tax exemption business from the net profit of the non-tax exemption business. After the period of exemption of corporate income tax, the company has the right to deduct the accumulated losses of the tax exemption business to deduct from the net profits arising after the period of the exemption of corporate income tax.

48. HOW TO REVISE TREASURY TRANSACTIONS FOR MORE FAVOURABLE TAX SAVINGS
III.

49. A DTA country and a non-DTA country should be studied.
III. HOW TO REVISE TREASURY TRANSACTIONS FOR MORE FAVOURABLE TAX SAVINGS
Source income and resident income in a source country or a resident country should be considered.
A DTA country and a non-DTA country should be studied.
Payment for goods is generally exempted from withholding tax.
Combination of a sale of goods and a provision of service is not subject to withholding tax but separation of a sale of goods and a provision of service results in withholding tax on a service fee.
Service fees should be distinguished from royalty.
Gross-up provision should be allowed for cross-border transaction only.
A domestic transaction should not have a gross-up provision.
Holding company and operating companies should be properly incorporated in a foreign country.

50. Sale and goods to a DTA foreign company
III. HOW TO REVISE TREASURY TRANSACTIONS FOR MORE FAVOURABLE TAX SAVINGS
Revenue Expenses and capital expenditures should be carefully considered.
Sale and goods to a DTA foreign company
Receipt of services from a DTA foreign company
Tax planning for real estate company
A relevant DTA should be taken into consideration.
Interest on the loan should be paid by a Thai company to a foreign bank, not a foreign company.
Use of the network of the DTA for the tax planning

51. The payment for use of software is subject to withholding tax.
III. HOW TO REVISE TREASURY TRANSACTIONS FOR MORE FAVOURABLE TAX SAVINGS
Business profits
The payment for use of software is subject to withholding tax.
Training of personnel for utilization of the software is related to the royalty which is chargeable to tax.
Service
A company entered into an agreement for preparation of food and drink for people for consumption. It is a service on restaurant which is not subject to withholding tax. It the withholding tax is made, the company can receive the refund within 3 years from the last date of the due date of filing the tax return.

52. Interest paid to a foreign branch
III. HOW TO REVISE TREASURY TRANSACTIONS FOR MORE FAVOURABLE TAX SAVINGS
Dividend
Unilateral relief is available for the payment of dividend by a foreign company to its Thai holding company provided that certain conditions are satisfied.
Interest paid to a foreign branch
Interest paid to a foreign branch of a Thai bank
Company A entered into a loan agreement with the Hong Kong branch of Bank B which is incorporated under law of Thailand. The Hong Kong Branch raised its fund from customers in Hong Kong. Company A paid interest to the Hong Kong Branch , it is regarded as payment of interest to Bank B in Thailand , Company is not required to withhold tax on the interest.
As the Hong Kong Branch is operated outside Thailand , the payment of interest to the Hong Kong branch is not chargeable to specific business tax.

53. Sale of shares for capital gains
III. HOW TO REVISE TREASURY TRANSACTIONS FOR MORE FAVOURABLE TAX SAVINGS
Payment of royalty
The rate of withholding tax for payment for the use of software may be reduced under certain DTA between Thailand and its counterparties.
Sale of shares for capital gains
A company in Singapore sells shares of a Thai Company to another Thai company and receives capital gains , the capital gains are subject to 15% withholding tax unless the company in Singapore does not carries on its business in Thailand , the capital gains are exempted from Thai tax.

54. a multinational corporation an associated enterprise
III. HOW TO REVISE TREASURY TRANSACTIONS FOR MORE FAVOURABLE TAX SAVINGS
Thin capitalization
Issues
a multinational corporation
an associated enterprise
excessive interest rate
debt to equity ratio

55. Thai taxation law has no provisions on thin capitalization.
III. HOW TO REVISE TREASURY TRANSACTIONS FOR MORE FAVOURABLE TAX SAVINGS
Thai taxation law has no provisions on thin capitalization.
However, the Office of the BOI may impose the debt to equity ratio for any company applying for investment promotion in Thailand.
Thailand has Foreign Exchange Act to control inward and outward remittance of money into and out of Thailand.
Excessive interest rate may lead to non-deductibility of excessive interest expenses.
This means that if the interest rate is capped at 15%. But the interest rate is charged at 20%. Only 5% excessive interest rate is prohibited to be deductible.

56. Thin capitalization applies to the case :
III. HOW TO REVISE TREASURY TRANSACTIONS FOR MORE FAVOURABLE TAX SAVINGS
Thin capitalization is a form of very low equity financing by a parent company into its associate enterprise including its subsidiary, branch or permanent establishment at the same time, the parent company lends a very high loan to its subsidiary.
Thin capitalization applies to the case :
1. A MNC lends money to its subsidiary.
2. A MNC holds shares in its subsidiary.
In case the MNC is a lender and a shareholder of its subsidiary. Profits of the subsidiary can be transferred by the subsidiary to its parent company.
Payment for shares is regarded as shareholders equity and cannot be deducted as expenses.
But payment of interest is deductible as the tax expenses.

57. - select a counter party, not the same bank, for a swap transaction
III. HOW TO REVISE TREASURY TRANSACTIONS FOR MORE FAVOURABLE TAX SAVINGS
SWAP
- select a counter party, not the same bank, for a swap transaction
- pay fees in a transaction
avoid default payment
Currency Swap
No payment is made between difference between cross currencies under cross currency swap. As a result, no assessable income arises.

58. III. HOW TO REVISE TREASURY TRANSACTIONS FOR MORE
III. HOW TO REVISE TREASURY TRANSACTIONS FOR MORE FAVOURABLE TAX SAVINGS
Interest Swap
In general, difference between interest rates under interest rate swap between company A and Bank A (if company A enters into a loan agreement with bank B) is regarded as income under Section 40 (8).
In particular, difference between interest rates under interest rate swap between company A and Bank B (if company A enters into a loan agreement with bank B) is regarded as income under Section 40 (4).
Default Payment
In the case of default of payment under interest rate swap, cross currency swap or cross currency interest swap, interest or penalty is regarded as interest under Section 40 (4) (a).

59. IV.
EFFECTIVE PRACTICES TO
ENHANCE TAX COMPLIANCE

60. Existing laws and regulations on taxation have been complied with.
IV. EFFECTIVE PRACTICES TO ENHANCE TAX COMPLIANCE
Existing laws and regulations on taxation have been complied with.
It is beneficial to update on new tax benefits.
Agreements and legal documents shall be in line with the requirement for compliance with taxation law.
Consulting with experienced tax lawyers.

61. V. HOW TO MEASURE AND IMPROVE THE EFFECTIVENESS OF TAX PLANNING AND
COMPLIANCE IN THE CURRENT TIME V.

62. Use of tax benefits under the Revenue Code Use of tax losses
V. HOW TO MEASURE AND IMPROVE THE EFFECTIVENESS OF TAX PLANNING AND COMPLIANCE IN THE CURRENT TIME
Use of tax benefits under the Revenue Code
Use of tax losses
Tax effectiveness under DTA
Issues under Tax rulings

63. Tax Planning by way of stepping stones
V. HOW TO MEASURE AND IMPROVE THE EFFECTIVENESS OF TAX PLANNING AND COMPLIANCE IN THE CURRENT TIME
Tax Planning by way of stepping stones
Chart 1
Company D
Company C
Company B
Company A
Foreign Country
Thailand

64. Tax Planning by way of stepping stones
V. HOW TO MEASURE AND IMPROVE THE EFFECTIVENESS OF TAX PLANNING AND COMPLIANCE IN THE CURRENT TIME
Tax Planning by way of stepping stones
Chart 2
Company B
Company C
Country 2
Country 3
Company A
Country 1

65. Preparing proper documents of transactions
V. HOW TO MEASURE AND IMPROVE THE EFFECTIVENESS OF TAX PLANNING AND COMPLIANCE IN THE CURRENT TIME
Preparing proper documents of transactions
Reasons can be effectively raised with officials of the Revenue Department.

66. SCL THANK YOU Picharn Sukparangsee PARTNER
SIAM CITY LAW OFFICES LIMITED
20th Floor, Rajanakarn Building,
183 South Sathorn Road,
Bangkok 10120, Thailand
Tel: (662) – 8
Fax: (662)
SCL
THANK YOU