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Unfair Dismissal in cases where the company’s operation is at a loss (not true)
(Decision of the Court of Appeal for Specialized Cases No. 2980/2018)

Dismissal due to the employer experiencing economic problems and continuing loss. It is considered to bran employment termination with reasonable cause. The employer has a duty to prove the necessity of dismissal due to such reason. The employer will terminate an employee due to aforementioned reasons; it must be clearly that the employer’s loss situation at the time of dismissal of the employee is related to the employer’s business trend in subsequent years. Experiencing a crisis to the point of being unable to continue operating If not resolved by dismissal, the employer will suffer losses to the point of being unable to continue operations.

Employee’s welfare regarding bus shuttle is related to labor and tax laws

In the case where the employer provides employee welfare by arranging shuttle buses in order to facilitate employee. There are related legal issues as follows :

2.1 Revenue tax

CIT:the company must schedule buses to pick up and drop off employees at points designated by the employer at various meeting points. It must be equal and discrimination so it will be considered to be related to the business operations then the employer has the right to use expenses related to employee transportation to calculate corporate income tax.

VAT:whether the company take employee transportation expenses for calculation of input tax, it depends on the number of seats in the staff shuttle.

In the case of passenger cars or passengers with seats not exceeding 10 people + leasing + for use in business:The company has no right to deduct the input tax from car rental from the output tax in VAT calculating because it is a prohibited tax under 82/5(6) + Section 2 (1) paragraph 1 of the announcement of the Director-General of the Revenue Department regarding Value Added Tax No. 42. Therefore, if the company purchases or rents a car, it can be calculated as input tax.

In the case that the employer hires another company to carry out the transportation of employees as specified by the employer:Transportation expenses are considered to be income according to the Revenue Department Order No. TP 4/2528 No. 12/4 which withholding tax at the rate of 1 percent must be deducted which the company providing for employee transportation services will be exempt from VAT under 81 (1)(ณ)

In the case where the employer agrees with the hirer to provide employee transportation services according to the specified date, time and route. The vehicle used for the service remains in the possession of the contractor and there is no other service other than transporting employees:it is considered a contract of carriage under section 608 of CCC. The employer as the payer has a duty to withhold tax by calculating the deduction at the rate of 1.0 percent according to Section 12/4 (2) of the Revenue Department Order No. TP 4/2528. However, transportation is not in the list of stamp duty rates attached to the Revenue Code. Therefore, there is no need to pay stamp duty.

But if it is the case that the employer company makes a car or vehicle rental contract:The car renter must hand over possession to the employer company. It is considered to be a contract for renting property under 573 of CCC. The company as the payer has a duty to deduct withholding tax at the rate of 5 percent according to Section 6 (2) of the Revenue Department Order No. T.P. 4/2528 which the employer has a duty to deduct withholding tax by lease contract. Additionally, Rental of a car which are considered to be movable property, it is not an instrument listed in the list of stamp duty. Therefore, there is no need to pay stamp duty.

2.2.Labor law

(Supreme Court Judgment No. 2687/2000)
The employer provides transportation benefits for employees according to the date, time and route specified and there was an accident during that time It is not considered to be a work-related danger. But if the employer allows the employee to go to work outside the normal place of work and the employee has an accident while traveling. It is considered to be a work-related danger.

(Supreme Court judgment no. 7734-7739/2010)
If the employer changes the bus route to pick up employees, such changes are considered to be changes in details. It is not the essence of the employment conditions. Therefore, it cannot yet be considered a change in employment conditions that is not beneficial to the employees.

Dept set-off, Personal management and labor disputes
(Supreme Court Judgment No. 13798/2014)

Mainly, debt set-off is considered to be deduction of wages under section 76 of the Labor Protection Act which the law prohibits employers from deducting or setting off debts unless it is an exception. However, if it is to offset debts that the employee has already left the job or has terminated. Employers have the right to do under principle of debt set-off according to the CCC even though it is not specified in the work regulations. In this regard, section 76 only prohibits to offset wage in cases where the employee is still under employment. Moreover, employers can make a unilateral set-off without the consent from the other parties.

Law on unfair contract terms with a case study of a contract to fund training abroad.
Judgment The Court of Appeal for Specialized Cases Judgment No. 1422/2557

In case that the defendant agreed to enter into a contract to provide scholarships to train abroad with the plaintiff. It shows that the defendant does not yet have a license to fly in the Boeing 737-200 aircraft required to work according to the defendant’s employment in the position of second pilot, the training resulted in the defendant receiving a license to work and receive wages in return. The training is therefore truly beneficial to the defendant, and when comparing the amount of training expenses, the facts appear that the plaintiff has incurred expenses in the amount of 231,364.20 baht, which is 14 days of training, but must return to work for the plaintiff for no less than 3 years. This does not cause the defendant to have to bear more burden than is normally expected. Even though the plaintiff has a better economic status than the defendant who is an employee. It is not the case that it is an agreement that gives the plaintiff an advantage over the defendant.
As for the provision, the defendant must reimburse the training expenses by working for wages. If defendant does not work until the end of the 3 years period according to the employment, the defendant must reimburse training expenses in full plus a penalty equal to 3 times the expenses and interest. It is a provision that protects the plaintiff’s business from losing employees who have invested in training, and the defendant can choose after completing the training, he will return to work with the plaintiff or will reimburse the training expenses along with penalties and interest. In this case, it is not a requirement that causes the defendant to bear more burden than is normally expected. The employment to fund training abroad it is not an unfair agreement term according to the Unfair Contract Terms Act B.E. 2540, Section 4, paragraph three and Section 5, paragraph one.

Tax Ruling

Value Added Tax (VAT) – Case of an Exporter Entitled to 0% Tax Rate
Revenue Department Ruling No. GorKor 0702/Paw/1887
Date 4 April 2023

Inquiry:

1. Company Q, a VAT-registered business engaged in importing and exporting goods, purchases and imports goods from Company A, located abroad, after completing customs procedures. Subsequently, Company Q sells and exports the goods to Company B, also located abroad, by ship, and uses a shipping company to handle the customs procedures for export in the name of Company Q. For payments to Company A and receipts from Company B, Company Q processes these transactions through the account of Company K, a legal entity established under Thai law.
2. The Revenue Department officials requested Company Q to explain why it did not directly handle payments and receipts but instead processed them through Company K’s account. Company Q explained that Mr. M, a shareholder of Company Q, previously served as the managing director of Company K in 2020 and had authority to disburse money from Company K’s account.
3. Company K had entered into a sales contract with Company B. Subsequently, due to a conflict between Mr. M and other directors of Company K, Mr. M joined Ms. J to establish and operate Company Q. Mr. M then made an agreement with Company B to have Company Q replace Company K as the seller. Therefore, the payments to Company A and receipts from Company B were processed through Company K’s account but are now processed through Company Q’s account. There are no legal relations between Company Q and Company K.
4. Company Q inquired whether, under clause 2(4) of the Revenue Department’s Directive No. Paw.97/2543, which specifies the documentation required for exporters to prove payment for goods per invoice in the name of the VAT-registered entity, such as L/C, T/T, or T/P documents, the company would be considered an exporter eligible for a 0% VAT rate if payments are received through another entity’s account without being an agent or having any relationship with the account owner.

Decision:

In the case where a company sells and exports goods abroad, it qualifies as an exporter under Section 77/1(13) and is entitled to a 0% VAT rate under Section 80/1(1) of the Revenue Code. The Revenue Department has established verification guidelines for assessing officers, which can be checked against the documents specified in clause 2 of notification No. Paw.97/2543. Therefore, if the company provides copies of import and export declarations and invoices to the officers but the payment evidence shows that transactions were processed through another company’s account, or if the company provides other documents proving that it is indeed the seller or exporter, the company is entitled to a 0% VAT rate under the Revenue Code.