The Assets Scrutiny Committee (ASC) will wrap up its tax probe against two grown-up children of ousted prime minister Thaksin Shinawatra involving a profit of 1.5 billion baht from the Shin Corp share sale by the end of the month. According to a committee member and a source, the panel was expected to cite the Finance Ministry's tax ruling to overrule Revenue Department advice given earlier to the Shinawatra family that the profit would be tax-free.
The panel's move came amid recent attempts by the Revenue Department chief Sirot Sawadpanish to explain to the ASC his U-turn decision to tax the pair, claiming he found new information on the case.
Viroj Laohaphan, head of the ASC's sub-committee handling the probe, said recently that his team would decide by the end of the year whether to order Panthongtae and Pinthongta Shinawatra to pay tax on the profit.
He insisted the decision would be made based on fair judgment and existing legal mechanisms without political or public pressure.
Ample Rich Investments Ltd sold 164.6 million Shin shares to each of Mr Thaksin's two children outside the stock market at one baht each only a few days before they were resold to Temasek for 49.25 baht.
A source on the sub-panel said consideration of the case had almost come to an end, pending only a final discussion on one legal aspect.
The sub-panel, which comprises certain members of the ASC and experts from other organisations, had agreed to apply articles 9 (bi) and 39 of the Revenue Code, and a Finance Ministry tax ruling issued in 1995 to the case.
This meant the pair's 1.5-billion-baht profit was considered subject to capital gains tax as they had bought the shares at one baht apiece while the market value was about 47 baht apiece.
The difference between the sale and purchase prices would be used for taxation and the siblings were likely to be forced to pay 5.6-5.8 billion baht in tax, said the source.
Noppadol Pattama, a legal adviser to the Shinawatra family, recently insisted that the siblings would fight the case in court because the tax agency had already assured the family that the deal was tax-exempt.
But the Shinawatra family could find it hard to continue citing such advice to counter the tax liability if the case went to court because the sub-panel aims to use the tax ruling as a key tool in the case.
''This kind of tax ruling is final according to the tax law and overrules any decision made by the Revenue Department,'' said the source, adding that the only thing that could take precedence over the ruling was a court verdict. The ruling provided grounds for consideration of tax cases involving personal income tax liability incurred where a person received or bought shares at a price lower than market value.
The source said one last discussion among the members involved interpretation of the term ''shares'' in the ruling. The interpretation was necessary as the Revenue Department earlier argued that the siblings were not liable to pay tax because the shares they received were not the shares issued by Ample Rich, but Shin Corp and later acquired by Ample Rich, and so this definition of shares should not be applied to them.
The sub-panel continued its probe even after the tax agency recently informed the siblings that they were liable to tax. Representatives of the pair plan to submit more documents on the deal.
Article Directory: http://www.articletrunk.com
Article Submission made possible by: www.articles-submit.com
Courtesy of:The Powerful Financial Directory
Please Rate this Article
Not yet Rated