Thaksin Favored by Central Tax Court’s Ruling on B17bn Case

The Central Tax Court ruled in favor of former Prime Minister Thaksin Shinawatra, reversing the Revenue Department’s order to pay around 17 billion baht in taxes for selling a stake in Shin Corp in 2006.

On July 18, the court ruled that the Revenues Department summons for a tax assessment against the former prime minister’s children Panthongtae and Pintongta was illegal.

The order was issued under the Revenue Code’s Section 19, but both siblings were only representatives holding shares for Mr. Thaksin, the court said.

Furthermore, the Revenues Department failed to summon the former prime minister for the final valuation before the deadline, and the transaction did not constitute a change of ownership in Shin Corp’s shares.

Mr. Thaksin continued to own the shares and was not subject to tax under the Revenue Code’s Section 39 and section 40 (2). Consequently, the tax assessment requested by the officials and the committee set up to review the former prime minister’s appeal was illegal, the court added.

The Central Tax Court ruled to revoke the Revenue Department’s Por Ngor Dor 12 form demanding 17.6 billion baht in back tax payments.

The tax notice was delivered in March 2017. However, Mr. Thaksin appealed the order in April that same year and filed a civil lawsuit against the Revenues Department and the officials who made up the committee that reviewed his appeal – Pongsak Methapitpat, Prapat Sanansilp, and Pisit Srivarant.

The Revenues Department conducted the tax assessment after the Supreme Court’s Criminal Division for Holders of Political Positions decided to seize Mr. Thaksin’s assets valued at 46 billion baht.

However, the court ruled on Monday that the officials had acted within their jurisdiction and were not held responsible.

In its ruling, the court also found that Panthongtae and Pintongta had acted as proxies on behalf of their father when selling the shares in January 2006.

The siblings bought 329 million Shin Corp shares from Ample Rich, an offshore holding firm run by the Shinawatra family, for one baht each. They made approximately 16 billion baht in capital gains by selling the Shin shares registered in their names to Temasek through the Stock Exchange of Thailand for 49.25 baht each.

The government ordered the department to collect around 16 billion baht in taxes and fines from Mr. Thaksin for the deal. However, many aides to the former prime minister contested the tax claim, arguing that the transaction was not subject to tax.