Thailand signs International Tax Convention, CRS requirements imminent

Having been listed on the EU greylist following a review by the European Council in February 2020 on non-cooperative tax jurisdictions, Thailand became the latest signatory state to the Convention on Mutual Administrative Assistance in Tax Matters earlier this month. This will obligate Thailand to enact, execute, and adhere to requirements set by the Common Reporting Standards (“CRS”).

The aim of the convention is to facilitate cooperation between signatory states to better execute national tax laws, close existing loopholes, and eliminate the risk of tax evasion. As a signatory, Thailand will be required to exchange taxpayer information on request, assist in tax examinations and collections, and provide administrative assistance. The taxes outlined by the convention include taxes on income and profits, capital gains, inheritance, and net wealth.

For taxpaying individuals and entities in Thailand, the ratification of the convention could entail stricter regulations surrounding KYC and AML on top of revised accounting requirements that must be met regardless of whether or not transactions are conducted in the Kingdom. Thailand has been given until 30 August 2021 to ratify the convention to offset being placed on the EU blacklist which can adversely affect residents based in Thailand with investments abroad.

No announcements have been made so far regarding when Thailand will ratify the convention. However, Silk Legal will continue to monitor developments and provide updates when they are available.

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