ALG&Associates(THAILAND) Co., Ltd. -Legal and tax services in Thailand-

Law update during July 2023

Topics/News：DBD pushing “Carbon Credit” as a business collateral

Department of Business Development and other government agencies such as the Federation of Thai Industries, the Office of Fiscal Economics has discussed promoting for ‘carbon credits’ as business collateral under Business Security Act B.E.2558(2015). In future, business operator having carbon credits would be able to use this carbon credits as business collateral for loan or financial service.

Carbon credit means the amount of greenhouse gas that can be reduced or stored. In Thailand, currently, Thailand Greenhouse Gas Management Organization (TGO) will certify the number of greenhouse gases that business operator can be reduced or stored under the Thailand Voluntary Emission Reduction Program (T-VER). Since this carbon credits can be treated in the market, they can be counted as an assent of business operator. DBD and other agency believe that treatment of carbon credits as business collateral promote more business operators to be interesting in carbon credits

Important Latest Law and Regulation Summary

1. The Royal Decree (No. 763) Revenue Department exempts the tax for unit-holders in property funds, and mutual property funds

The Revenue Department issued the Royal Decree (No. 763) on tax exemption for the person holding investment units in real estate funds and having the incomes arising during June 2, 2023 – December 31, 2024 from the conversion of investment units in real estate funds into trust funds. Tax base, revenue or instrument or the transfer or creation of the property rights or any rights in the property that was arising due to above conversion shall be exempted from Value Adding Tax (VAT), Specific Business Tax, and stamp duty.

2. Revenue Department exempts income tax for the companies or the juristic persons that invested implementation of the information systems or software for electronics invoices or tax remittance etc.

The Revenue Department issued the Royal Decree (No. 766) on income tax exemption for companies, partnership or juristic person for income that equal amount to the expenses actually paid during January 1, 2023 to December 31, 2025 to invest implementation of the system, computer software, equipment or service as follows:

100% of expense actually paid during above period for the following items shall be exempt from corporate income tax;

2.1 implementation of electronic data preparation system and input system, computer software, electronic certificate storage equipment, computer or other common utilities, used for taxpayer’s own business for the purpose of preparation, delivery, receiving, or storage of electronics tax invoices.

2.2 implementation of system, computer software, electronic certificate storage equipment, computer or other common utilities, used for taxpayer’s own business for the purpose of remitting withholding tax, income tax and value added tax.

2.3 service fee paid to service provider for preparation and sending of electronic data, electronic certificate, and electronic data storage, for the purpose of preparation, delivery, receiving, or storage of electronics tax invoices under 2.1.

2.4 service fee paid to service provider for remittance, electronic certificate, and electronic data storage, for the purpose of remitting withholding tax, income tax and value added tax under 2.2.

3. Preparation, delivery or keep invoices or receipts by new electronics procedures

Recently, the Revenue Department has announced the regulations, procedures and conditions for the preparation, delivery and storage of new electronic tax invoices and electronic receipts, to comply with Ministerial Regulation No. 384, 2022 regarding the processing of electronic document. Accordingly, any business operator who wishes to issue electronic tax invoices and electronic receipts submit Bor. Aor. 01 application via electronic system of Revenue Department to obtain the identity and verification As a result, such business operator operators will be announced from Revenue Department as issuer of electronic tax invoice and then, may prepare the electronic invoices and electronic receipts. The system for the electric invoices preparation must have secure methods that are reliable in both hardware and software systems according to the announcement. descriptions of tax invoices or receipts shall be same as stipulated by Revenue Department as well. the announced electronic tax invoice issuer must send electronic invoice data attached with the electronic signature to the purchaser or the service recipients, and must prepare or store the electric data and send it to the Revenue Department via electric system of Revenue Department within 14 days of next month.

In case that the registrant operators need to change the password, electronic mail address or cancelling the preparation of the tax invoices or receipts, that operator have to submitted the request for changing (Bor. Aor. 09 Form) via electronic system of Revenue Department.

Important Judgment or ruling

1.Whether Electronics contract subject to stamps duty or not? Supreme court judgment No.427/2565 (2022)

Electronic contract is legally enforceable like a paper contract in accordance with the Electronic Transactions Act 2001, that is electronic information shall be treated equally as paper, whether the paper is made in writing and signed or taken as evidence in court. However, electronic contracts are only applicable to the parties under the Civil and Commercial Code. it does not result in stamp duty, because the tax must be expressly provided by law to be payable. The provisions of Chapter 6 regarding Stamp Duty of the Revenue Code are required only for making paper instruments. Therefore, making of electronic instruments is not subject to pay stamp duty as well. Although the Notification of the Director-General of the Revenue Department on Stamp Duty (No. 58) Re: Determining the method of payment of monetary duty on electronic instruments in 23 types of electronic instruments are required to be paid in cash via the internet instead of using blackout stamps or paper stamps, above notification does not make all 23 types of electronic instruments compulsory to pay stamp duty, because the notification of the Director-General of the Revenue Department has a lower rank than Chapter 6 Stamp Duty of the Revenue Code, which has the status of an Act. Therefore, electronic contract is not subject to pay stamp duty.

2.Unfair termination in case that employee made fraud to record time card. Specialized Appeal Court No.4711/2561（2018）

In case that two employees violate the work regulations due to that an employee had other employee clock in and out of work, one of the employee was punished by a warning letter, and not increase such employee’s salary for 6 months, while the other employee was dismissal. this dismissal is considered to be unequal discrimination against employees and an unfair termination accordance to section 49 of Labor Court Establishment and Procedure Act 1979, because such interchangeable clocking is not considered to be dishonesty or untrustworthy behavior. Therefore, it is not a serious violation of work regulations, notification or instruction and different punishments on the facts for violating the same work regulations.

3.Termination of the employees who’s taken often sick leave not considered to be unfair termination. Supreme Court Judgment No.1021/2531 (1988)

In case that the employee taken a sick leave for 34 days during a year, which was exceed from the sick leave rights that stipulated in the company regulations that such leave cannot be exceeded than 30 days. This employee often had taken sick leave every month. it means that the employees was unhealthy,

inability to work hard in the duties of an employee. Therefore, it can be considered that the employee was sick and decreased work performance and it was reasonable for the employer to terminate the employment. Such dismissal is not an unfair dismissal.