Thaksin's kids must pay B5.7bn
ASC finds them liable for tax on Shin deals
SURASAK GLAHAN and WICHIT CHANTANUSORNSIRI
Two grown-up children of deposed prime minister Thaksin Shinawatra must pay 5.69 billion baht in personal income tax incurred from Shin Corp share deals they made with their own firm, Ample Rich Investments last year, the Assets Scrutiny Committee (ASC) ruled yesterday.
The ASC added that Panthongtae and Pinthongta Shinawatra would have to pay 847 million baht in surcharges on behalf of Ample Rich as the firm failed to submit withholding tax to the tax agency upon the transfer of the shares.
The two also face the prospect of being forced to pay a huge fine equal to the personal income tax amount plus surcharges as they seem not to have included this tax liability in their tax returns submitted to the Revenue Department yesterday, said ASC tax probe team chief Viroj Laohaphan.
A lawyer for the Shinawatra family insisted the pair would appeal the ruling and seek the Supreme Court's verdict.
Yesterday was the deadline for taxpayers to submit their tax returns for 2006.
Revenue Department officials said Ms Pinthongta asked for a tax refund of "several tens of thousands of baht". But the reason why could not be established yesterday.
Mr Viroj said the tax liability stemmed from the purchase by the siblings of Shin Corp shares from Ample Rich.
Ample Rich sold 329.2 million Shin shares to the pair on Jan 20, 2006 for one baht each. One working day later, they sold their Shin shares to Temasek Holdings of Singapore for 49.25 baht apiece, reaping capital gains of over 15.8 billion baht.
The transactions were part of the 73.3-billion-baht buyout of Shin Corp by Temasek.
The ASC ruled that the siblings have to pay tax on the profits they earned whether or not the shares were sold inside or outside the stock market, said Mr Viroj.
Noppadon Pattama, a Shinawatra family lawyer, said the siblings would cite Revenue Department advice in 2005 to counter the tax liability. The department then said the deal would be tax-free.
If the siblings failed to include this tax liability in their tax returns filed yesterday, they will have to pay a 1.5% per month late charge. In this event, they will also have to pay a fine of the same amount once they are summoned by the tax agency to clear the matter, said Anutep Pongpitak, a member of the probe team, adding that the ASC's rulings would be submitted to the tax agency by tomorrow.
Upon selling the shares to the siblings, Ample Rich had a duty to withhold personal income tax of 4.03 billion baht from the pair, as required by the Revenue Code, and submit the tax to the Revenue Department by Feb 7 last year, Mr Viroj said. But that did not happen and the firm has to pay a surcharge of 847 million baht incurred as of April 7 this year, he added.
Sources said neither Ms Pinthongta nor Mr Panthongtae declared any tax liability related to Ample Rich, a holding vehicle set up in the British Virgin Islands several years ago by Mr Thaksin to manage his personal shareholdings in Shin Corp.
Revenue Department officials have argued that the siblings face personal tax liabilities of over 2.8 billion baht each from the Ample Rich transaction, based on a top tax bracket of 37%.
The tax liability came not from the sale to Temasek, made through the Stock Exchange of Thailand and thus qualifying for a blanket capital gains tax waiver. Instead, authorities say the initial purchase for one baht per share from Ample Rich and subsequent benefits should be taxed.
Officials said the department would likely submit a notification to both Mr Panthongtae and Ms Pinthongta seeking payment for the revenues gained from the Ample Rich deal. The two would then have 30 days to either pay the additional taxes or appeal. Failure to pay the additional funds could result in fines of up to 1.5% of the unpaid liability each month as well as a doubling of the overall tax bill.
Bangkok Post
Tuesday April 03, 2007
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