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ResourcesCorporate and Tax AdvisoryThailand Tax LawCorporate Due Diligence for Tax Compliance in Thailand

Corporate Due Diligence for Tax Compliance in Thailand

Transcript of the above video:

As the title of this video suggests, we're discussing Corporate Due Diligence especially with respect to tax compliance. 

What are we talking about here?  Well in various Merges and Acquisitions, or just even in rather small corporate buyouts just involving one foreigner coming to Thailand and just buying out the small business of another foreigner, ascertaining the tax compliance of a given company is exceptionally important when doing one's due diligence on the issue of such a Merger and Acquisition. 

So what are we talking about specifically with tax compliance?  The sort of the "elephant in the room" if you will, is going to be the yearly audited financial statements. It is failure to keep up with those can result in substantial penalties associated with failure to file which can even results into criminal penalties possibly, for the directors and the stakeholders involved in such an Enterprise.

That being said, there are other tax compliance issues that should be sort of the looked at when looking at doing an M&A here in Thailand.  Most notably, if a company is VAT registered, ascertaining whether or not they are up to date on their VAT filings is going to be of exceptional interest to those who are looking into a Merger and Acquisition here in the Kingdom.

Not only that, there's even issues involving for example Social Security filings; ascertaining how long employees have been on the Company. Have their social security contributions been being made on a timely basis as failure to do so can result in negative consequences for the business owner who could be a brand new business owner coming into a business.

Finally withholding tax; another issue with respect to tax compliance where you know failure to keep up-to-date with a company’s withholding tax can be problematic for the person who's buying out the company

So for this reason and many, many more, it's a really good idea to contact legal professionals who also have tax professionals to assist in ascertaining the exact posture of a given company before the commencement of a Merger and Acquisition in order to put oneself on the best possible footing post-merger with respect to tax authorities hear in the Kingdom of Thailand.