Former Sansiri president ensnared in tax-minimising controversy

[webfact]

 

A tax-minimising strategy, alleged by Chuvit Kamolvisit to involve Srettha Thavisin, the former President of Sansiri, a development firm listed on the SET, appears to be a common practice amongst landlords seeking to reduce tax liabilities on land sales.

 

Property DNA’s Managing Director, Surachet Kongcheep, observed that it is typical for landowners to aim to lessen tax payments attached to land transactions. ” If two or more individuals collectively own a piece of land, the Department of Lands will consider them as a group.

 

When the group sells the land, they must pay tax at a progressive rate. But the progressive rate will not be collected if the land has a single owner,” he explained.

 

Typically, tax law stipulates payment of specific business tax and property transfer tax by both single and group landowners during land sales or transfers. According to Surachet, to dodge the group-based tax, multiple landowners regularly transfer ownership in a one-day-at-a-time manner, hence appearing as single owners.

” It is a common practice by landlords and this action is not illegal. In general, during land negotiations, unless it’s a forced sale, the sellers usually have more bargaining power than the buyers,” he included.

 

by Alex Morgan

Image courtesy of เศรษฐา ทวีสิน - Srettha Thavisin, Facebook

 

Full story: https://thethaiger.com/news/business/former-sansiri-president-ensnared-in-tax-minimising-controversy

 

-- © Copyright Thaiger 2023-08-05

 

- Cigna offers a range of visa-compliant plans that meet the minimum requirement of medical treatment, including COVID-19, up to THB 3m. For more information on all expat health insurance plans click here.

[hotchilli]

3 hours ago, webfact said:

A tax-minimising strategy, alleged by Chuvit Kamolvisit to involve Srettha Thavisin, the former President of Sansiri, a development firm listed on the SET, appears to be a common practice amongst landlords seeking to reduce tax liabilities on land sales.

The world over... it's called using loop-holes.

[PETERTHEEATER]

As the article states, the strategy is NOT illegal. Yet, in this particular case something smells or Chuwit would not be barking.

[newnative]

Srettha's turn.

[kingstonkid]

Will the pprp rep file a claim against sretha 

[ukrules]

6 hours ago, webfact said:

It is a common practice by landlords and this action is not illegal

So we're talking about tax avoidance vs tax evasion, one is a crime, the other isn't.

 

The rest of the world doesn't have a problem with this, if they do - they change the law.

 

It's a non issue

[SoilSpoil]

1 hour ago, newnative said:

Srettha's turn.

No way, he is a 'good guy'  and therefor allowed break the laws. 

[Dogmatix]

6 hours ago, webfact said:

 

A tax-minimising strategy, alleged by Chuvit Kamolvisit to involve Srettha Thavisin, the former President of Sansiri, a development firm listed on the SET, appears to be a common practice amongst landlords seeking to reduce tax liabilities on land sales.

 

Property DNA’s Managing Director, Surachet Kongcheep, observed that it is typical for landowners to aim to lessen tax payments attached to land transactions. ” If two or more individuals collectively own a piece of land, the Department of Lands will consider them as a group.

 

When the group sells the land, they must pay tax at a progressive rate. But the progressive rate will not be collected if the land has a single owner,” he explained.

 

Typically, tax law stipulates payment of specific business tax and property transfer tax by both single and group landowners during land sales or transfers. According to Surachet, to dodge the group-based tax, multiple landowners regularly transfer ownership in a one-day-at-a-time manner, hence appearing as single owners.

” It is a common practice by landlords and this action is not illegal. In general, during land negotiations, unless it’s a forced sale, the sellers usually have more bargaining power than the buyers,” he included.

 

by Alex Morgan

Image courtesy of เศรษฐา ทวีสิน - Srettha Thavisin, Facebook

 

Full story: https://thethaiger.com/news/business/former-sansiri-president-ensnared-in-tax-minimising-controversy

 

-- © Copyright Thaiger 2023-08-05

 

- Cigna offers a range of visa-compliant plans that meet the minimum requirement of medical treatment, including COVID-19, up to THB 3m. For more information on all expat health insurance plans click here.

Surachet is correct in saying that sellers aim to lessen tax payments but I am not sure that the method used is really legal as he implies.  It would be a huge loophole, that any group of owners could use. Therefore no point in having the provision to tax groups of owners as a partnership. 

 

The other issue is that nearly half was paid in cash, according to Chuvit and the tax paid is extremely low, even though they were taxed as individuals. Chuvit's implication is that the cash payments were to allow the sellers to understate the price to evade, not avoid tax, in this case.  Chuvit suggested the total tax payable by a partnership would have 521 million vs the 59 million actually paid. Of course understating sales prices is also common practice, even though Surachet didn't mention it.  With sales price claimed by Chuvit to be 4 million a sq wah, the appraised price must have been much lower than that in 2019 making understatement easy to to. I recall it was big news when appraised value hit 1 million a sq wah in Silom in the latest 2023 re-appraisal and that was said to the highest in the country.  So Sarasin Road in 2019 must have been a lot lower than that.  

 

In the original article, which came from another source not mentioned by Thaiger, Surachet mentioned the common practice of property developers buying land through companies owned by family members of executives and then selling on to their company at a risk free profit. This was in response to Chuvit's allegation that Sansiri used an agent or nominee to buy the land. If the land was bought by nominees and then sold on to Sansiri at a profit that would be a related party transaction that would have to be reported to the SEC but Sansiri has not reported any related party transactions since before the sale.  I can vouch for the fact that this practice of taking a chunk out of the middle of land purchases is common for listed property developers and other listed companies that buy land.  I have even heard CEOs boasting about making easy money this way.  However, it is theft from the minority shareholders pure and simple.

 

Even though all 3 of these practices are commonplace, they all amount to serious breaches of good governance and ethical behaviour.  Aiding and abetting tax avoidance is unethical, while aiding and abetting tax evasion is criminal.  So much for some guy whose only sin amounts to holding a tiny block of worthlessshares in a media company that has been defunct for nearly 20 years. 

[cleopatra2]

2 hours ago, Dogmatix said:

Surachet is correct in saying that sellers aim to lessen tax payments but I am not sure that the method used is really legal as he implies.  It would be a huge loophole, that any group of owners could use. Therefore no point in having the provision to tax groups of owners as a partnership. 

 

The other issue is that nearly half was paid in cash, according to Chuvit and the tax paid is extremely low, even though they were taxed as individuals. Chuvit's implication is that the cash payments were to allow the sellers to understate the price to evade, not avoid tax, in this case.  Chuvit suggested the total tax payable by a partnership would have 521 million vs the 59 million actually paid. Of course understating sales prices is also common practice, even though Surachet didn't mention it.  With sales price claimed by Chuvit to be 4 million a sq wah, the appraised price must have been much lower than that in 2019 making understatement easy to to. I recall it was big news when appraised value hit 1 million a sq wah in Silom in the latest 2023 re-appraisal and that was said to the highest in the country.  So Sarasin Road in 2019 must have been a lot lower than that.  

 

In the original article, which came from another source not mentioned by Thaiger, Surachet mentioned the common practice of property developers buying land through companies owned by family members of executives and then selling on to their company at a risk free profit. This was in response to Chuvit's allegation that Sansiri used an agent or nominee to buy the land. If the land was bought by nominees and then sold on to Sansiri at a profit that would be a related party transaction that would have to be reported to the SEC but Sansiri has not reported any related party transactions since before the sale.  I can vouch for the fact that this practice of taking a chunk out of the middle of land purchases is common for listed property developers and other listed companies that buy land.  I have even heard CEOs boasting about making easy money this way.  However, it is theft from the minority shareholders pure and simple.

 

Even though all 3 of these practices are commonplace, they all amount to serious breaches of good governance and ethical behaviour.  Aiding and abetting tax avoidance is unethical, while aiding and abetting tax evasion is criminal.  So much for some guy whose only sin amounts to holding a tiny block of worthlessshares in a media company that has been defunct for nearly 20 years. 

Aiding and abetting tax avoidance cannot be unethical . That is why companies and individuals employ accountants , to reduce the amount of tax due.

[MrJ2U]

11 hours ago, webfact said:

this action is not illegal.

Okay then.

 

 

 

[Celsius]

One of the most overrated developers on the planet.

 

Just because the windows don't leak after heavy rain is somehow a pinnacle of real estate ability in Thailand.