#  >  > Living And Legal Affairs In Thailand >  >  > Thailand and Asia News >  >  > Business, Finance & Economics in Thailand >  >  Thailand Tax Refund Claims - 10 Truths to Share with Foreigners

## Mid

*Thailand Tax Refund Claims - 10 Truths to Share with Foreigners*   Napaporn Vatcharanukul
January 2013 

 Over  my 32 years of tax investigations work (the first half, as a Thailand  Revenue Dept Audit Division officer and the second half, as a Tax  Investigations Consultant in the private sector), Ive heard many  foreign CFOs and CEOs complain about getting tax refunds out of the  Thailand Revenue Dept, describing it as being awkward, backward, archaic  (and even, communist). 

 To  assist foreign CFOs and CEOs to try to understand the mindset of the  Thailand Revenue Dept officers a little bit more, I should like to share  with you the following 10 truths:

*1. There is no automatic tax refund system in Thailand, you will always be audited* 

 The  first truth to note that is, unlike the more advanced countries around  the world, there is no system of automatic processing of tax refunds by  the Thailand Revenue Dept. In Thailand, you will never receive a cheque  back from the Revenue Dept within 2 weeks or 4 weeks as you may have  received back home. Instead, all tax refund claims are sent to a special  unit within the Revenue Dept, called the Tax Refund Division,  which will, for 99% of the time, direct the tax refund claim to the  Audit Division for investigation, and will not do anything more until  the Audit Division has completed its tax audit and has reported back to  the Tax Refund Division. This is a 'must do' directive of the Thailand  Revenue Dept to the Tax Refund Division, and unless you are a  famous-name businessman or you have political connections, you will not  be able to short-cut the tax investigation by the Audit Division.

*2. There is no "taxpayer rights" directive in Thailand* 

 Irrespective  of the tax law giving you rights to make tax refund claims as well as  rights to claim interest on tax refund claims that have not been  refunded within three months, and irrespective of any civil law "rights"  you may have over your money that's in the Revenue Dept's pocket, until  such time the Revenue Dept issues a 'must do' directive to Audit  Division officers to recognize "taxpayer rights", they will continue to  think their "rights" are more important than your "rights".

*3. Why should a resource owner refund money to a resource user* 

 From  way back when foreigners first started doing business in Thailand,  Thailand Revenue officers have believed foreigners come to Thailand to  use the resources of Thailand for their own benefit (not for the  countrys benefit). And when confronted by a foreigner claiming a tax  refund from them, Revenue officers cannot reconcile in their minds why  they should.

*4. Ways will be found to delay and avoid paying tax refund claims* 

 From  the very moment your tax refund claim is referred to the Audit Division  officers, they will be looking for ways to delay and avoid paying tax  refund claims. Audit Division officers are very well trained (by the  older officers) in delay and avoidance tactics, such as extending tax  refund claim cases, and even freezing tax refund claim cases.

*5. Be aware of your own staffs co-operation with Thailand Revenue officers* 

 Which  brings me to the next truth to share with foreign CFOs and CEOs.  Another way Revenue Audit officers delay and avoid paying tax refund  claims, particularly to profit-making companies in Thailand, is getting  close to the foreigners own Thai staff and convincing them to shorten  the audit process work and time, save tax liability for the company, and  the good of the country etc.

*6. The Thailand Revenue Department is a fully 100% compliant bureaucracy* 

 The  Thailand Revenue Department epitomizes (and even defines) a fully 100%  compliant bureaucracy. There are so many levels within the Revenue  Department for Audit Division officers to satisfy, and the requirement  to satisfy the many upper levels is more important than any refund  claim.

*7. Never expect Thailand Revenue Department officers to have to follow the laws*

 Another  truth to share is that foreign CFOs and CEOs should never expect the  Audit Division officers in Thailand to have to follow the laws. Even in  the case of a foreigner managing to convince one particular Audit  Division officer regarding a particular matter of law, if that Audit  Division officer is a member of a particular Audit Division team that  needs to satisfy the upper levels, again this is more important than  any particular matter of law.

*8. Know when to outsource tax refund claim assistance work* 

 Thai  tax refund claim assistance is certainly often needed when a foreign  CFO or CEO is really wanting his or her tax refund back from the  Thailand Revenue Department. But it is also a truth that foreign CFOs or  CEOs need to know when that assistance is required. For tax refund  matters in Thailand it is really necessary to assess the capabilities of  Thai staff, and if the assessment is that its just too much for the  Thai staff to handle, then the outsource assistance work really does  need to start at the very beginning before the Revenue officers are able  to control the Thai staff.

*9. Know who to outsource tax refund claim assistance work*

 Another  truth to note is that in Thailand, Thai tax experts are not experts at  all when it comes to tax refund claims. Foreign CFOs and CEOs need to  note that not only do Thai tax experts have to submit to the  Thai-cultural superiority of Revenue officers (just the same as Thai  company staff have to), they have the added burden of fear-of-causing  harm to their consulting firms.

*10. Manage Thai taxes in order to avoid having to claim refunds* 

 My  final truth to share with foreign CFOs and CEOs is that it is necessary  in Thailand for foreign CFOs and CEOs to spend more time than what they  would do back home, managing Thailand tax refund positions. For  instance, for withholding tax refund positions whereby withholding tax  deductions are greater than expected corporate income tax payable at  year-end, a plan to delay or defer a head office expense charge to save  having to claim a withholding tax refund can often be beneficial.  Similarly, for value added tax refund positions, if the company is doing  a particular type of business whereby Input VAT will always exceed  Output VAT on a monthly basis, a plan to manage this position through  the filing of the appropriate Revenue Dept application forms (for  example the good exporter application forms) can again often be  beneficial.

   sherrings.com

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## baldrick

> 7. Never expect Thailand Revenue Department officers to have to follow the laws


never expect any thai bureaucrat to have to follow laws 




> the Thai-cultural “superiority” of Revenue officers


yes they are retarded

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## Ratchaburi

Every year I receive my tax refund.
My office girl look after that for me, she a good girl.

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## Racin

In short,  most Thai officials are ignorant, uneducated, stubborn, unethical and dishonest.

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## English Noodles

^You're a regular little ray of light aint ya, Racin?

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## Rocksteady

> they have the added burden of fear-of-causing harm to their consulting firms.


Thais are pack orientated and will nearly always side with each other if any conflict involving non-Thais - regardless of the situation.

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## Eliminator

Hi Mid, do you work for, advertise or represent this company in any way? I noticed you put their website at the end of your post.  :ourrules:   ::chitown::   :Smile:

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## Rural Surin

> Originally Posted by Mid
> 
>  they have the added burden of fear-of-causing harm to their consulting firms.
> 
> 
> Thais are pack orientated and will nearly always side with each other if any conflict involving non-Thais - regardless of the situation.


Not always.

Make sure you use broader strokes in your assessments and stereotypes.

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## Rocksteady

^ True - it's why I went with 'nearly' in my 'profiling'... :mid:

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