Business Transfer Questions

[OhMyCodBangkok]

Hey

Bit of a problem here, wondering if you can direct us to how we can sort it out.

We purchased a business in Bangkok, the company was setup in a head office, doing business as type way. We purchased the assets only and plan to continue doing business under the trade name, adding it as a DBA to our current head office company.

The issues are;

1. The previous owner owes some VAT to the gov't and are told it needs to be cleared off prior to the gov't allowing us to do the asset transfer. Assuming this is correct what will we need to take/provide in the way of paperwork or forms to make this happen.

2. Where do we go and what do we need to provide in order to file the the assets sale with the gov't so they are aware that OUR company will be handling the VAT, social fund, etc.. and the OLD head office company is no longer listed anywhere in conjunction with the business name.

3. Finally how much tax is due on the sale of the company percentage wise and who pays it, buyer or seller?

Thanks in advance.

[SunbeltAsiaExpert]

1. The previous owner owes some VAT to the government and are told it needs to be cleared off prior to the government allowing us to do

the asset transfer. Assuming this is correct what will we need to take/provide in the way of paperwork or forms to make this happen.

Answer: If the previous owner failed to pay the VAT then the Thai Government will seek to confiscate the company's assets. They will not authorize the assets to be transferred as they are the only way to assure that some or all of the outstanding VAT will be paid.

2. Where do we go and what do we need to provide in order to file the the assets sale with the government so they are aware that OUR company will be handling the

VAT, social fund, etc. and the OLD head office company is no longer listed anywhere in conjunction with the business name.

Answer: If you have the proper documentation to start a new Thai company (including the landlord documents)

then the old company owing VAT will not be your concern. This can present problems when the new company uses the same name/location as the former company

that still owes outstanding VAT. According to the government if the Authorized Director of the former company did not register their changes of the

company's address both with the Department of Business Development (Ministry of Commerce) and the Revenue Department. Both government sectors would still

recognize that that former company would still exist in the designated premises. It should be noted for the Seller (Company that still owes VAT to the revenue department), in the case if the seller wishes to dissolve the company, they would not be able to as it would show on their record that responsibility(ies)/liability(ies) still outstanding.

3. Finally how much tax is due on the sale of the company percentage wise and who pays it, buyer or seller?

Answer: Depending on the type of sales if it's the sales of the company's asset. The Seller (the company) would have to take record the asset sales and would considered as income of the company. This is determined when the company filed the half-year or end of year audit. Whereas if it is the sales of the shares, the Seller (as the shareholder) would be liable of the tax, if there was a profit from the sale of the shares.

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