Overall findings
Thailand’s legal framework implementing the AEOI Standard is in place but needs improvement in order to be fully consistent with the requirements of the AEOI Terms of Reference. While Thailand’s international legal framework to exchange the information with all of Thailand’s Interested Appropriate Partners (CR2) is consistent with the requirements, its domestic legislative framework requiring Reporting Financial Institutions to conduct the due diligence and reporting procedures (CR1) has deficiencies significant to the proper functioning of elements of the AEOI Standard. More specifically, the deficiencies relate to defining Controlling Persons, Participating Jurisdictions and the enforcement framework.
The methodology used for the peer reviews and that therefore underpins this report is outlined in Chapter 2.
Overall determination on the legal framework: In Place But Needs Improvement
Conclusions on the legal framework
General context
Thailand commenced exchanges under the AEOI Standard in 2023.
In order to provide for Reporting Financial Institutions to collect and report the information to be exchanged, Thailand relies on:
Emergency Decree on Exchange of Information for Implementation of the International Agreement on Taxation B.E. 2566 (2023), in force from 31 March 2023;
Ministerial Regulation on the Exchange of Information for Implementation of the International Agreement on Taxation, B.E. 2566 (2023), in force from 16 August 2023;
Notification of the Ministry of Finance, Re: Determination of Reportable Jurisdictions and Participating Jurisdictions under Competent Authority Agreement on the Automatic Exchange of Information, in force from 16 August 2023;
Notification of the Ministry of Finance Re: Determination of Non-Reportable Person under Emergency Decree on Exchange of Information for Implementation of the International Agreement on Taxation B.E. 2566 (2023), in force from 16 August 2023;
Notification of the Director-General of the Revenue Department on Rules, Procedures, Conditions and Formats for Submitting Financial Account Information under Competent Authority Agreement on the Automatic Exchange of Information, in force from 16 August 2023; and
Notification of the Ministry of Finance, Re: Determination of Reporting Financial Institution for Reportable Financial Account Information under Emergency Decree on Exchange of Information for Implementation of the International Agreement on Taxation B.E. 2566 (2023), in force from 27 April 2024.
Under this framework Reporting Financial Institutions were required to commence the due diligence procedures in relation to New Accounts from 16 August 2023. With respect to Preexisting Accounts, Reporting Financial Institutions were required to complete due diligence procedures on High Value Individual Accounts by 15 September 2023 or 30 June 2024 and on Lower Value Individual Accounts and Entity Accounts by 30 June 2024.
With respect to the exchange of information under the AEOI Standard, Thailand is a Party to the Convention on Mutual Administrative Assistance in Tax Matters and activated the associated CRS Multilateral Competent Authority Agreement in time for exchanges in 2023.
Detailed findings
The detailed findings for Thailand are below, organised per Core Requirement (CR) and sub-requirement (SR), as extracted from the AEOI Terms of Reference (see Annex B).
CR1 Domestic legal framework: Jurisdictions should have a domestic legislative framework in place that requires all Reporting Financial Institutions to conduct the due diligence and reporting procedures in the CRS, and that provides for the effective implementation of the CRS as set out therein.
Overall determination on the legal framework: In Place But Needs Improvement
Thailand’s domestic legislative framework is in place and contains many of the key aspects of CRS and its Commentary requiring Reporting Financial Institutions to conduct the due diligence and reporting procedures, but it needs improvement in relation to the due diligence procedures that must be applied to Financial Accounts (SR 1.2) and the framework to enforce the requirements (SR 1.4). More specifically, Thailand’s domestic legislative framework does not define the term Controlling Persons in accordance with the requirements, its approach with respect to Participating Jurisdictions is not in line with the AEOI Standard and there are deficiencies in Thailand’s enforcement framework.
SR 1.1 Jurisdictions should define the scope of Reporting Financial Institutions consistently with the CRS.
Thailand has defined the scope of Reporting Financial Institutions in its domestic legislative framework in accordance with the CRS and its Commentary.
Recommendations:
No recommendations made.
SR 1.2 Jurisdictions should define the scope of Financial Accounts and Reportable Accounts consistently with the CRS and incorporate the due diligence procedures to identify them.
Thailand has defined the scope of the Financial Accounts that are required to be reported in its domestic legislative framework and has incorporated the due diligence procedures that must be applied to identify them in a manner that is largely consistent with the CRS and its Commentary. However, deficiencies have been identified. More specifically, Thailand’s legislative framework does not define Controlling Persons in accordance with the requirements and its approach with respect to Participating Jurisdictions is not in line with the AEOI Standard.
Recommendation:
Thailand should amend its domestic legislative framework to ensure that “Controlling Person” is defined in accordance with the AEOI Standard.
Thailand should amend its domestic legislative framework to ensure that the approach taken with respect to the 44 jurisdictions defined as Participating Jurisdictions and with which Thailand does not have an agreement to exchange CRS information with (two of which have not implemented the AEOI Standard), is in accordance with the AEOI Standard
SR 1.3 Jurisdictions should incorporate the reporting requirements contained in Section I of the CRS into their domestic legislative framework.
Thailand has incorporated the reporting requirements in its domestic legislative framework in accordance with the CRS and its Commentary.
Recommendations:
No recommendations made.
SR 1.4 Jurisdictions should have a legislative framework in place that allows for the enforcement of the requirements of the CRS in practice.
Thailand has a legislative framework in place to enforce the requirements in a manner that is largely consistent with the CRS and its Commentary. However, deficiencies have been identified. More specifically, Thailand’s legislative framework:
does not provide the relevant authorities with the power to directly access the records held by Reporting Financial Institutions in relation to the due diligence procedures applied;
has sanctions on Reporting Financial Institutions for failing to report information that have a limited deterrent effect, as they depend on an order to report information being issued and are not applicable if the order is complied with;
has limited sanctions for filing incorrect information as the incorrect filing must be shown to have been intentional;
does not impose sanctions for failing to carry out the due diligence procedures required under the AEOI Standard, where it does not impact reporting;
does not include an explicit legal basis to impose or enforce a sanction where a Reporting Financial Institution is a legal arrangement; and
does not include measures to ensure that valid self-certifications are always obtained and validated for New Accounts.
These are the key elements of the required enforcement framework and are therefore material to the proper functioning of the AEOI Standard.
Recommendations:
Thailand should amend its domestic legislative framework to provide the appropriate authorities with the power to directly access the records and evidence relevant for verifying and enforcing the AEOI Standard.
Thailand should amend its domestic legislative framework to ensure that sanctions for failure to report information are capable of being applied even where the noncompliance is corrected.
Thailand should amend its domestic legislative framework to ensure that sanctions for filing incorrect information are not limited to intentional reporting of incorrect information.
Thailand should ensure that it has sanction provisions applicable to Reporting Financial Institutions that fail to conduct the due diligence requirements in accordance with the AEOI Standard, regardless of the impact on reporting.
Thailand should amend its legislative framework to ensure that it is able to sanction non-compliance by any legal arrangement that is a Reporting Financial Institution.
Thailand should introduce measures to ensure that valid self-certifications are always obtained and validated for New Accounts.
CR2 International legal framework: Jurisdictions should have exchange relationships in effect with all Interested Appropriate Partners as committed to and that provide for the exchange of information in accordance with the Model CAA.
Determination: In Place
Thailand’s international legal framework to exchange the information is in place, is consistent with the Model CAA and its Commentary and provides for exchange with all of Thailand’s Interested Appropriate Partners (i.e. all jurisdictions that are interested in receiving information from Thailand and that meet the required standard in relation to confidentiality and data safeguards) (SRs 2.1 – 2.3).
SR 2.1 Jurisdictions should have exchange agreements in effect with all Interested Appropriate Partners that permit the automatic exchange of CRS information.
Thailand has exchange agreements that permit the automatic exchange of CRS information in effect with all its Interested Appropriate Partners.
Recommendations:
No recommendations made.
SR 2.2 Such an exchange agreement should be put in place without undue delay, following the receipt of an expression of interest from an Interested Appropriate Partner.
Thailand put in place its exchange agreements without undue delay.
Recommendations:
No recommendations made.
SR 2.3 Jurisdictions should ensure that the exchange agreements in effect provide for the exchange of information in accordance with the requirements of the Model CAA.
Thailand’s exchange agreements provide for the exchange of information in accordance with the requirements of the Model CAA.
Recommendations:
No recommendations made.
Comments by the assessed jurisdiction
No comments made.