Massive Fine By Revenue Department

[Barefootbertie]

I have a small company that exports all its products and paid a local Bangkok firm (that advertises in the newspapers every day) to complete and submit my VAT forms.

My sales are all EXPORT and are zero rated, and the firm of accountants/lawyers did NOT include the sales invoices in the VAT returns.

Now, three years later, I have fines totalling 350,000 Bahts to pay.

Question 1. Does anybody have similar experiences?

Question 2. Does anybody know of a GOOD Thai VAT lawyer.

[Richard Hall]

I have a small company that exports all its products and paid a local Bangkok firm (that advertises in the newspapers every day) to complete and submit my VAT forms.

My sales are all EXPORT and are zero rated, and the firm of accountants/lawyers did NOT include the sales invoices in the VAT returns.

Now, three years later, I have fines totalling 350,000 Bahts to pay.

Question 1. Does anybody have similar experiences?

Question 2. Does anybody know of a GOOD Thai VAT lawyer.

Obviously, at this stage you have no other chance than clearing the matter with the Revenue Department as quickly as possible and maybe can negotiate a compromise helping you to reduce the fines. Eventually, you will need to pay up soonest because with every day/month the amount is increasing because they constantly charge you interest for the outstanding debt.

There are many cases that an accounting company screwed up and the customer has to bear a heavy fine. A former neigbour of mine (Thai lady) runs a garment company and well, the accountant never filed VAT forms and eventually did not hand out the salaries to the employees. The problem got her totally by surprise when some employees showed up and claimed outstanding money. Only way YOU have to regulate first and in the second step sue the accounting company for damages (long lasting process).

The punishment system for tax issues here in Thailand is indeed quite interesting. Your fine will eventually be the amount an error occured on. A while ago my accountant made erroneously a miscalculation coming up with a tax refund of Baht 13,000. Well since this refund was not justified my fine was eventually exactly those Baht 13,000 plus interest summing up to around Baht 20,000. The Revenue Department just takes for granted you want to cheat them for x amount and hence the proper fine for your "crime" will be that x amount. Worst case is when a mistake occured several years ago and all of a sudden gets dicovered accidentally. Due to the interest (something like 2% a month) this can add up severely. Therefore get clear with the authorities as quickly as you can because another month means another 2%. Also if you run a business your have to make a monthly VAT report even if there was no VAT involved. In this case the form just indicates "0". If one month is missing or filed late this is subject to a fine. I think Baht 200 (per missing form) and if this was three years ago x 36 month plus 72% interest. Imagine the calculation if VAT reports have never been filed.

Once I have been told that in running a business have a trustful accountant is the MOST important issue at all because if accounting is not probably it is the silently approaching death of your entire enterprise. You wrongly assume everything is fine and all of a sudden it hits you like a lightning from a cristal blue sky.

As far as a good and trustful lawyer is concerned (and possibly also accounting company) guess Greg (Sunbelt) or Steve (Indosiam) should be able to make a recommendation.

Good luck, but I'm afraid this case will make your purse slimmer. No way around it because the Revenue Department will not accept that not YOU (your company) but a contracted company has made the mistake because it is YOUR tax report.

Lots of luck you are going to need it.

[Sunbelt Asia]

Our company has an accounting department that does it. Our fees for a English speaking licensed Thai accountant who supervises another firm to make sure everything is done right is 7,000 Baht per month (up to 30 invoices) and 18,000 for the audit.

www.sunbeltasia.com