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

1.Latest Law update

Interesting News

1.Sending personal information to abroad.

In the case where the personal data controller sends or transfer personal information to a foreign country which is the destination country from which personal data is received. There must be adequate measures to protect personal information according to the criteria for personal data protection as announced by the committee except for sending or transferring information:

1. It is in compliance with the law, such as the law on changing international taxpayer information, etc.
2. Obtain consent from the owner of personal data.
3. To prevent or stop danger to the life, body, or health of the data owner, such as sending Mr. A.’s blood data from Thailand to a hospital in Japan for consideration and for emergency surgery, etc.
4. To carry out missions for important public benefits

If the above exceptions are not met and the destination country does not have adequate protection for personal data. The data controller who will transfer data abroad may use the appropriate protection measures in the form of contractual clauses that comply with contractual terms for sending or transferring data abroad, such as Data Transfer Agreements, etc.
In the case where the data controller is in Thailand has established a policy to protect information policy for sending or transferring information to the data controller or data processor located abroad and are in the same business or business group to conduct business or joint business, also known as the personal data protection policy of the group or the same business group or Biding Corporate Rules: BCRs. If the policy to protect such information Inspected and certified by the Office of Personal Data Protection transmission/transfer to foreign countries that comply with data protection policies that have been verified and approved can be done by the policy to protect information in the nature of a group of businesses or the same group of businesses. For conducting business or joint business and criteria and methods for inspection and certification must be as announced by the committee.

2.Ministry of Commerce prepares to amend fundamental laws.

The Ministry of Commerce is preparing to amend laws under its jurisdiction to ensure that the laws are up-to-date and responsive to the rapidly changing current situation, and to facilitate business operations. There will be amendments to four laws, namely: 1. Copyright Act, 2. Geographical Indication Act, 3. Thai Shipper’s Council Act, and 4. Export and Import of Goods Act of 1979. Additionally, the Ministry of Commerce has also undertaken secondary law amendments, such as ministerial announcements, departmental announcements, and ministerial regulations, totaling 31 amendments. These amendments mainly aim to facilitate businesses and the public, reduce procedures, promote transparency, and ensure fairness. Other laws will be amended in the future, within 6-18 months.

3.Tax burden when giving gifts and souvenirs during the New Year festival.

Celebrate a New Year’s party and employers buy gifts and enter them into a prize lottery.
Ruling No. GorKor 0706/3552 dated 2 May 2006

1. Input tax arising from purchasing gifts for employees to draw on New Year’s Day. It is considered an input tax that is directly related to the business of selling products or providing services to entrepreneurs. The company has the right to deduct input tax from output tax in calculating VAT according to section 82/3. The company is responsible for paying VAT at 7.0 percent of the value of the prizes that the company procures to distribute to employees, because it fits the nature of selling according to section 77/1 (8).

But if the gift It is just something given according to general business customs and has no more than reasonable value/price the company is not required to take the value of the goods given as a gift in the calculation of the value of the tax base according to section 79 (4) + Clause 2(6) of the Announcement of the Director-General of the Revenue Department No. 40

2. Employee award distribution It is considered an additional benefit for employees. It is classified as income due to employment, Section 40 (1) employees who receive awards, such awards must be included in the calculation of personal income tax, and the company has a duty to deduct withholding tax according to Section 50 (1), therefore it does not qualify as income received from a gift. On the occasion of a ceremony or occasion of tradition, Section 42 (10)

3. Copy of tax invoice It is a document that VAT registered operators must keep for use in reporting sales tax, Section 87/3, a copy of the tax invoice can be printed or written on carbon paper or as a photograph. The company has the right to use it as evidence for reporting sales tax in accordance with Section 87 and Section 87/3 paragraph 2 + Clause 7 of the Notification of the Director-General of the Revenue Department No. 89.
Celebrate a New Year’s party and vacations in abroad for employees according to welfare regulations.
Ruling No. GorKor 0706/9276 dated 9 November 2005

The employer celebrates a New Year’s party and take employees on vacation in abroad once a year which is provided to all employees annually which are both welfare It is considered another benefit received from hiring workers according to Section 40 (1), but celebrating a New Year’s party is It is considered to be income received from giving according to customary occasions. It is exempted to calculate income tax according to Section 42 (10)
As for taking employees on vacation in abroad once a year, Company’s employees It must be included in the calculation for paying income tax, and the company has a duty to withhold income tax every time it pays this assessable income according to Section 50 (1).
(Discussion of the Revenue Department No. GorKor 0706 (GorMor.14)/131 dated 8 November 2545)
And the company that pays for such benefits to employees It is considered an expense for profit or for a specific business, and it is not an expense that is of a personal nature or given by charm. The company can deduct it as an expense in calculating net profit for paying corporate income tax it is not prohibited according to Section 65 ter (3) and (13)

Celebrate a New Year’s party and vacations in abroad for employees according to welfare regulations.
Ruling No. GorKor 0706/9276 dated 9 November 2005

The employer celebrates a New Year’s party and take employees on vacation in abroad once a year which is provided to all employees annually which are both welfare It is considered another benefit received from hiring workers according to Section 40 (1), but celebrating a New Year’s party is It is considered to be income received from giving according to customary occasions. It is exempted to calculate income tax according to Section 42 (10)
As for taking employees on vacation in abroad once a year, Company’s employees It must be included in the calculation for paying income tax, and the company has a duty to withhold income tax every time it pays this assessable income according to Section 50 (1). (Discussion of the Revenue Department No. GorKor 0706 (GorMor.14)/131 dated 8 November 2545)
And the company that pays for such benefits to employees It is considered an expense for profit or for a specific business, and it is not an expense that is of a personal nature or given by charm. The company can deduct it as an expense in calculating net profit for paying corporate income tax it is not prohibited according to Section 65 ter (3) and (13)

Distributing a calendar
Ruling No. GorKor 0706 (GorMor.01)/266 dated 29 August 2003

Distributing calendars during the New Year festival to customers is considered the sale of the company’s products according to Section 77/1 (8). But if the distribution of such calendars on the occasion of a ceremony or on the occasion of tradition and the price is reasonable, the company does not have to include the value of the calendar in calculating the value of the tax base according to Section 79 (4) + Clause 2 (6) of the Notification of the Director-General of the Revenue Department No. 40 and the company has the right to deduct the input tax resulting from the preparation of the said calendar in the calculation of Value Added Tax it is not prohibited according to Section 82/5 (3)

Give a souvenirs
Ruling No. GorKor. 0811/Gor.949 dated 29 July 2002

In the case where the company gives souvenirs such as Chinese New Year oranges, calendars, or notebooks to customers during traditional festivals. Including Chinese New Year and New Year. It is considered as the sale of products according to the Section 77/1(8) The company is not obliged to withhold income tax.

Buy gift baskets to give to customers.
Ruling No.0801/Por6945 dated 25 December 1996

1. Gift baskets that the company give it out as a gift to customers due to ceremonies or occasions of tradition such as Songkran, New Year, and the introduction of new products with the company’s business card with name, address and trademark attached to the said gift basket if the company gives it to customers according to general business customs, and the price or value is not more than reasonable price, the Company does not have to include the value of the said gift baskets as the value of the tax base in calculating Value Added Tax in accordance with Section 79 (4) + Clause 2 (6) Announcement of the Director- General of the Revenue Department About Value Added Tax No. 40

Important Judgment and Ruling

1. Policy on body checking of employees and property in retail business, hotels, and jewelry businesses.
Appeal Court for Specialized Cases Judgment No. 2742/2563

The defendant operates businesses such as retail, hotels, and jewelry by announcing a policy to check the bodies of employees and their property before entering and exiting the workplace every time. The objectives and punishments are specified in case of violation of the said regulations. The plaintiff (employee) is the assistant branch manager has a duty to supervise the inspection of employees entering and exiting every shift entering or leaving work. The plaintiff neglected it made the employees subordinate to the plaintiff acting dishonestly by taking money out of the store 2 times, totaling 15,000 baht, it can be considered a non-compliance with the said policy, and it is a violation of the defendant’s work regulations. The defendant was therefore able to terminate the employee without paying compensation and compensation in lieu of advance notice and is not considered an unfair dismissal.

2. Contract limiting the occupational rights of employees.
Appeal Court for Specialized Cases Judgment No. 2458/2565

The plaintiff operates a business as a broker to people who wish to buy and sell, rent or lease real estate into a contract with another party. The defendant used to be an employee of the plaintiff in position of real estate consultant. There is an agreement in the labor contract that the employee will not conduct business or work in any other establishment that competes with the employer within a period of 3 years from the date of termination of employment.

Later, the defendant was terminated from employment by the plaintiff, and go to work for a company that operates the same business as the plaintiff within 3 years. The court ruled that the agreement limiting occupational rights was enforceable. Because it is considered to protect the business interests of the employer. But this 3-year period may create an unreasonable burden on the defendant. It is an exercise of discretion. Therefore, it is considered appropriate to specify that it will be effective for only 1 year from the date the defendant ceases to be an employee according to Section 14/1 of the Labor Protection Act and Section 5 of the Unfair Contract Terms Act.

3. Night shift pay Housing assistance or house rent assistance Is it considered wages?
Labor Court Judgment No. 859/2565 and Appeal Court for Specialized Cases Judgment No. 171/2562

Employees are entitled to night shift pay and must work during the night shift If the employee does not work during the night will not receive such money. Working the night shift in this way It is considered as work during normal working hours on a working day, even though the shift pays the plaintiff has specified the criteria and conditions of payment in the announcement that it is a welfare benefit, but the money for this night shift was fixed by the plaintiff. Therefore, it has the nature of being paid in compensation for normal working hours. It is considered wages according to the Social Security Act, 2533

As for the housing assistance or house rent, the plaintiff in this case is a foreigner do not have a domicile or residence in Thailand, the 1st defendant therefore paid assistance for housing costs to the plaintiff. Even though that amount will be paid regularly every month without specifying conditions that the plaintiff must bring documents or evidence of renting the house to withdraw. It is just a method of payment the said house rental money is considered to be a payment to assist with housing welfare for the plaintiff only. It is not in compensation for work under an employment contract. Therefore, it is not considered wages.

4. Fixed Term Employment Contract.
Appeal Court for Specialized Cases Judgment No. 360/2561
In principle, if the labor contract has a fixed time period, there is a definite start and end period of work according to Section 118, paragraphs 3 and 4 of the Labor Protection Act. It is not considered as a termination of employment according to Section 118, paragraph 2, so the employer is not required to pay severance pay to the employee. But in this case, the defendant entered into a contract to hire the plaintiff to work as an employee. The starting and ending period is clearly specified, but in the said contract there is an agreement giving the other party the right to terminate the contract before the duration. The agreement would have the effect of being uncertain as to when the employment contract would end. Because the contract party may terminate the contract before the duration. The said contract is therefore considered as an employment contract with no fixed period. When terminated the defendant must pay severance pay to the plaintiff.