Thailand to start the automatic exchange of information this year

Keywords: Mazars, Thailand, Automatic exchange, Information

8 May 2023

The Act was issued in accordance with an agreement to implement the Common Reporting Standards (“the CRS”) that Thailand made a commitment to follow at the Global Forum on Transparency and Exchange of Information for Tax Purposes (“the Global Forum”) in 2017. The CRS require participating countries to share financial information on taxpayers and comply with the Automatic Exchange of Information (“AEOI”) requirements.

The key objective of the Act is to follow the CRS by requiring those financial institutions considered “reporting entities” to perform due diligence on customers, as well as to collect and report financial information to the Thai Revenue Department for the exchange of information with tax authorities in other countries that follow the CSR.

Reporting entities under the Act include banks and financial institutions, securities companies, authorized life insurance licensees, and credit card operators.

Under the Act, reportable information includes the following:

1. Information on the owner of or person who controls a financial account, such as name, address, tax identification number, date and place of birth, and other information, as specified by the Director-General of the Revenue Department;
2. Information on financial accounts, such as account numbers, account balances or the cash value of an insurance policy, interest received, and other benefits received, as specified by the Director-General of the Revenue Department; and
3. Information on the reporting entity, such as the name and identification number of the reporting entity.

Failure to comply with the reporting requirements will result in a maximum fine of THB 200,000. If false information is reported, the maximum fine will increase to THB 500,000.

In addition, reporting entities must keep records of the financial accounts reported on, as well as of the procedures taken to determine reportable information for auditing purposes, for a period of 6 years from the end of the calendar year in which information on a financial account is reported. Failure to keep such records will result in a maximum fine of THB 300,000.

Reporting entities must report information to the Revenue Department by June of the following year. For example, financial information for the 2023 calendar year must be reported to the Thai Revenue Department by June 2024. However, Thai government officials have stated that the first exchange of information with the tax authorities of other countries that follow the CSR will take place in September 2023. Therefore, reporting entities are expected to file the required information by June 2023.

Currently, the Act only provides a general framework for the exchange of information and the reporting requirements. Additional laws setting out further details regarding the requirements, the reporting process, and the timeline for this will likely be passed shortly.