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Electronic Tax Returns Introduced

15 May 2012

The Thai Revenue Department (TRD) encourages taxpayers to file tax returns and remit amount of tax payable electronically, called e-filing. The TRD is now in the process of a paperless campaign or 'RD Carbon Credit' to help save the earth from global warming. E-filing will be a tool for reducing cost and time of preparation the tax return in paper for taxpayers while the tax officials will reduce time to review and store the tax returns. Taxand Thailand takes a look at the tax return filing system and assesses who will benefit from the new tool.

Incentives of E-Filing
E-filing of tax returns (monthly and yearly) will expand the due date of tax filing up to 8 days from the due date of filing in paper. For example, the corporate taxpayers for the year ended 31 December 2011 are required to file its corporate tax return within 150 days from the last year end or 29 May 2012. However, filing a tax return online via e-filing will be permitted until by 6 June 2012.

Target group of taxpayers
E-Filing can be done for monthly withholding tax and VAT filings including annual corporate tax returns. The TRD encourages individuals and corporate taxpayers to adopt e-filing on an ongoing basis. This includes listed companies in the stock market and Thai subsidiary companies of foreign parent companies involved in cross-border transactions.

Tax consequences of E-Filing
The TRD envisages that e-filing will expedite the process of reconciliation for all taxpayers who use e-filing for the official tax audit process. In the past, the TRD adopted tax reconciliation for tax audit by telephone call, invitation notice, company visit, and by reviewing the relevant tax returns filed by the taxpayers. E-filing will be used for online reconciliation when customers deduct withholding tax for payment of service fees to their suppliers. As a result, the TRD is able to expand its tax base for more tax collection to around USD 5,000 million within a short period i.e 1-2 years.

The TRD believes that e-filing will help increase tax revenues for the government after corporate income tax rate reduced from 30% last year to 23% this year and 20% for 2013 and 2014. Additional tax revenues from e-filing will help compensate this shortfall.


Taxand's Take

The gap between the net of tax collection is narrowing making it more difficult for fraudulent taxpayers. Care should be taken when assigning a person to access the online filing as the TRD system requires the username and password to process the e-filing. In addition, the e-filing will require the payment online via credit card or internet banking and ATM payment. You need to ensure that your corporate system sets up this policy including a proper internal system of e-filing.

Your Taxand contact for further queries is:
Chinapat Visuttipat
T. +66 2632 1800

Taxand's Take Author