In general, a criminal tax fraud offence requires an intention to evade tax. Examples of criminal tax fraud offences are as follows:
According to section 37 of the Revenue Code, any person who performs the following acts shall be subject to an imprisonment from three months to seven years and a fine from THB 2,000 to THB 200,000:
i. intentionally notifies false statement or gives false information or answers with a false statement or shows false evidence to evade taxes or request for a tax refund, or
ii. by fault, fraud, scheme, or any other method of similar nature, evades or attempts to evade tax or request for a tax refund.
According to section 37 bis of the Revenue Code, any person intentionally fails to file tax return forms to evade tax shall be subject to an imprisonment of up to one year, or a fine of up to BHT 200,000, or both.
An adjustment of tax payable would not automatically trigger criminal proceedings for tax fraud. In order to constitute a tax fraud offence, other elements must also exist, for example, an intention to evade tax.
An application of tax penalty would not automatically trigger criminal proceedings. According to Thai laws, a penalty imposed under tax laws is not a criminal sentence. Again, other elements must also exist in order to constitute a criminal tax offence, e.g., an intention to evade tax.
An intention and a negligence can be the basis of a criminal offense under Thai laws. According to section 59 of the Criminal Code, a person shall be criminally liable only when such person commits an act intentionally, except in case of the law provides that such person must be liable when such person commits an act by negligence, or except in case of the law clearly provides that such person must be liable even though such person commits an act unintentionally.
No. A spontaneous filing of an amended tax return and complete payment of applicable tax (either through a self-disclosure program or not) would settle civil case (monetary) only. The initiation of criminal proceedings heavily depends on whether all criminal elements are satisfied.
Public prosecutors could not initiate a criminal proceeding against tax fraud case on their own. A criminal proceeding for tax case will be initiated by a tax officer filing a complaint with an investigation officer. When the investigation is completed and the investigation officer decides to proceed further with the case, the investigation officer will pass the case to the public prosecutor for their further consideration.
The statute of limitation for criminal offence related to tax relies on Section 95 of the Thai Criminal Code as follows:
- Twenty years in case of offences punishable with death, imprisonment for life, or imprisonment of twenty years;
- Fifteen years in case of offences punishable with imprisonment of over seven years but not reaching twenty years;
- Ten years in case of offences punishable with imprisonment of over one year up to seven years;
- Five years in case of offences punishable with imprisonment of over one month up to one year;
- One year in the case of offences punishable with imprisonment of one month or less, or other punishment.
The statute of limitation for criminal offence starts to run when the criminal offence is committed.
Samples of the criminal sentence for tax fraud under Thai tax laws are as follows:
According to section 37 of the Revenue Code, any person who performs the following acts shall be subject to an imprisonment from three months to seven years and a fine from THB 2,000 to THB 200,000:
- intentionally notifies false statement or gives false information or answers with a false statement or shows false evidence to evade taxes or request for a tax refund, or
- by fault, fraud, scheme, or any other method of similar nature, evades or attempts to evade tax or request for a tax refund.
According to section 37 bis of the Revenue Code, any person intentionally fails to file tax return forms to evade tax shall be subject to an imprisonment of up to one year, or a fine of up to BHT 200,000, or both.
The fact that the company has an internal compliance or risk mitigation program would not mitigate criminal liability of the company. Criminal liability depends on facts relating to the offence.
There is no specific self-disclosure program in Thailand. However, taxpayers have the right to voluntarily disclose and file an additional income tax return form to correct their tax filings previously submitted to the tax authority.
To elaborate, Thai income tax filing system is based on a self-assessment basis. Taxpayers must file an income tax return form, report their taxable income and expenses, and pay income tax to the Revenue Department. If it later appears to the taxpayer that any information submitted is incorrect, they can voluntarily file additional income tax return form to correct such information. If the incorrect information resulted in income tax shortfall, the taxpayer would be liable to pay income tax shortfall, including applicable surcharge and penalty.
Typically, a tax assessment would not automatically constitute a criminal offence and would not automatically trigger criminal proceedings. This is mainly because the criminal liabilities would heavily depend on whether all criminal elements are satisfied. If a tax assessment involves a criminal offence, there is no exemption from criminal liability for first-time offenders.
For your information, if a criminal offence in question is punishable with only a fine (without imprisonment), the tax officer is empowered to settle the criminal case by imposing a fine at a rate prescribed by relevant regulations and guidelines.
The fact that a criminal proceeding is initiated against the taxpayer for tax offence would not impact the statute of limitation period to assess tax. Again, statute of limitation for criminal cases shall start to run when the criminal offence is committed. The prosecutor must file a lawsuit against the criminal and bring the criminal to present before the court within the statute of limitation period.
Yes. A tax assessment to collect underpaid taxes is a civil matter (monetary), which is considered separately from the criminal case.
For a criminal offence that is punishable with only a fine (without imprisonment), the tax officer is empowered to settle the criminal case by imposing a fine at a rate prescribed by relevant regulations and guidelines.
Both individuals and companies can be prosecuted with criminal offences. According to the Act amending legal provisions concerning criminal liability of juristic person representatives (B.E. 2560), if the company commits a criminal offence and such offence results from an order or an action of the director or other person responsible for the operation of such company, or if such person has the duty to order or act, but omits such order or action, resulting in the company committing criminal offence, such person shall also be liable to criminal sentence.
Yes. The foreign employees / directors could be prosecuted as a principal or a supporter in criminal offence. Please also refer to our responses to question 14 above.
If the company paid tax incorrectly and was assessed by the Revenue Department to pay tax shortfall, the Revenue Department would claim such tax shortfall from the company directly. The employee or the director would not be responsible for paying tax shortfall to the Revenue Department.
Based on the publicly available information, there is no significant increase in criminal prosecution for tax offences over the last five years in Thailand.