Thailand Implements Mechanism to Promote Tax Transparency and Combat Tax Evasion on a Global Level
The Cabinet has approved a Ministerial Regulation issued under the Royal Decree on the Exchange of Information for International Agreements on Taxation B.E. 2566 (2023) (“Ministerial Regulation”) to implement the automatic information exchange for tax purposes. In addition, Thailand will be bound by Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information (MCAA).
Thailand has been a member of The Global Forum on Transparency and Exchange of Information for Tax Purposes since 2017. The Global Forum is a framework for the exchange of tax information by the Organization for Economic Cooperation and Development (“OECD”) committing to implement the automatic information exchange for tax purposes and Thailand’s Royal Decree on the Exchange of Information for International Agreements on Taxation B.E. 2566 (2023) (“Royal Decree”) to specify Thailand’s procedure in order to comply with OECD standards. OECD is an international organization that promotes economic cooperation and development among its 38 member countries and other partner countries around the world. The OECD provides policy advice, conducts research and analysis, and exchanges information on a wide variety of economic and social issues, including trade, investment, taxation, education, health, and the environment, among others. Thailand is not a member of the OECD but is an associate and participant in some OECD bodies and adheres to some OECD legal instruments.
MCAA on Automatic Exchange of Financial Account Information and The Global Forum on Transparency and Exchange of Information for Tax Purposes are both necessary for promoting tax transparency and combatting tax evasion on a global level. The Global Forum on Transparency and Exchange of Information for Tax Purposes provides a framework for countries to exchange information and collaborate in the fight against tax evasion, while the MCAA sets out the rules and procedures that countries must follow when automatically exchanging financial information under the OECD Common Reporting Standard (CRS). The MCAA is a tool that enables countries to meet their obligations to exchange information under the CRS, while the Global Forum provides a platform for cooperation and information exchange at the international level. Together, these two initiatives help to ensure that taxpayers cannot hide their assets and income in offshore jurisdictions and that all taxpayers pay their fair share of taxes according to their respective tax laws.
For Thailand, under Section 5 of the Royal Decree, the Ministry of Finance has proposed the Ministerial Regulation to set the criteria and procedures for the duties of persons responsible for reporting financial accounting information of financial institutions in Thailand. This Ministerial Regulation will support the exchanging of information in accordance with the Multilateral Competent Authority Agreement on Automatic Exchange of Information (“MCAA CRS”), improve data exchange operations as well as Thailand’s taxation transparency, and promote Thailand’s taxation and economic system. The Ministerial Regulation contains 6 titles:
- Reporting Persons,
- General Audits,
- Natural Person Account Audits,
- Juristic Person Account Audits,
- Special Criteria for Checking Customer Information, and
It also imposes precise definitions such as Depository Institutions, Financial Accounts, Deposit Accounts, and Reportable Financial Accounts, as well as types of reporting financial institutions, which are financial institutions by virtue of Thai law situated in Thailand and branches of financial institutions not under Thai law but located in Thailand, types of audits, and special criteria for checking customer information.
As mentioned, the Ministerial Regulation has been approved by the Cabinet and it will become effective after the date of publication in the Royal Gazette.
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