Asean tax laws need integrating judge

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Lack of progress in tax policy coordination between Thailand and other Asean members could lead to disputes and taxpayers could end up being victims, tax experts said.

Tax disputes are already happening as different parties interpret domestic

The Nation

tax laws differently. In some cases, it leads to taxpayers suffering from double taxation imposed by Asean governments, Prapas Kong-ied, a judge at the Central Tax Court, said yesterday.

Many tax disputes have happened and in some cases recently, the Supreme Court had to issue a ruling, Prapas said at the Asia-Pacific tax forum hosted by the Fiscal Policy Office.

A Thai citizen, only identified as Mr P, worked for a Thai company which had its business in the Philippines. P lived in the Philippines for a whole year and he received income from the parent company based in Thailand. The problem is to which country he should pay tax. According to the Revenue Code, he was not resident in Thailand that year, so he is not subject to tax payment. But when his parent company paid his salary, the company levied withholding tax and transferred the deducted money to the Revenue Department. Thai tax experts do not have the same view about withholding tax. Some say there should not be any withholding tax since the source of income is derived from activities in the Philippines. But the Revenue Department insisted on collecting the tax. The dispute was brought to the tax court, and the Supreme Court ruled in favour of the tax officials.

With the Philippines tax officials also collecting tax, Mr P found himself making a double tax payment.

AGREEMENT

Although the two countries have a double taxation agreement, it cannot be enforced in this case as Mr P did not live in Thailand in that year, so the agreement could not apply to this case, said Prapas.

Another interesting case involves a Thai consultancy that provided advisory services to another firm based in Indonesia about which Thai firms the Indonesia-based firm should buy its products from. The Indonesian firm followed the advice …

Full story from The Nation at http://goo.gl/ps5Wg