Due to the global crisis caused by the COVID-19 pandemic, the Thai Government has implemented a number of important initiatives aimed at supporting the Thai economy and affected industries.
As part of these initiatives, the Ministry of Finance of Thailand has enacted several important short terms and medium terms tax relief measures to support individual and corporate entities in Thailand to ease the hardships faced by many during these uncertain times. Set out below is a summary of these measures.
Defer tax filings and payments
Winemakers can run into significant tax problems after transferring their businesses to a company or trust structure. While income tax relief may be available on the transfer of the business assets, many winemakers and their accountants fail to realise that such restructures can eliminate or substantially reduce a winemaker’s entitlement to the Wine Equalisation Tax rebate. For winemakers who are heavily reliant on the WET rebate for profitability and cash flow, overlooking such consequences can be disastrous.
In late 2015, the High Court handed down its decision in Commissioner of Taxation v Australian Building Systems Pty Ltd (in liq) [2015] HCA 48. The High Court held (by a majority of 3:2) that, in the absence of an assessment, a liquidator is not required to retain funds from asset sale proceeds in order to meet a tax liability which could become payable as a result of a capital gain made on the sale. In doing so, the majority of the High Court affirmed the decision of the Full Federal Court and provided long awaited guidance to liquidators, receivers and administrators.
Any legislation or action which seeks to alter the pari passu distribution of an insolvent company's property amongst its creditors needs to be very carefully and comprehensively considered, and have regard to accrued rights and interests.
Introduction
On 21 February 2014, the Federal Court handed down its decision inAustralian Building Systems Pty Limited v Commissioner of Taxation [2014] FCA 116 (Australian Building Systems). The Court found that a liquidator was not legally required to retain an amount out of the proceeds on disposal of assets as part of the winding up of a company to pay tax which is or will become due in respect of a capital gain.
Section 254 of the Income Tax Assessment Act 1936 sets out the circumstances when a 'trustee' (which is defined to include a liquidator and a receiver) must account to the Commissioner, out of the proceeds of sale, for any capital gains tax (CGT) liability that would result as a consequence of the sale. Justice Logan of the Federal Court of Australia1 last Friday found that a liquidator does not have any obligation to pay under section 254 unless and until an assessment has been issued. A similar analysis would also apply to a receiver.
On 28 November 2016 the German Federal Fiscal Court (FFC) (GrS BFH 1/15, published on 8 February 2017) held that the guidance on a reorganisation tax privilege (Reorganization Decree (Sanierungserlass)) issued by the German Federal Ministry of Finance (FMF) in 2003 was invalid. The ruling has created great uncertainty for the restructuring practice in Germany regarding the proper tax treatment of restructuring gains.
In the 2011 budget speech, the Minister of Finance announced that the Government will consider exempting taxable capital gains or ordinary revenue imposed on an insolvent debtor if the debt owing by the debtor is cancelled or reduced.
La Dirección General de Tributos, en la consulta vinculante V2252-18, de 26 de julio de 2018, aclara cómo y cuándo un contribuyente del impuesto sobre la renta de las personas físicas habrá de imputarse las minusvalías latentes derivadas de una inversión en aportaciones financieras subordinadas de una cooperativa que posteriormente fue declarada en concurso, entrando en fase de liquidación.