The Revenue Department has warned large and medium-sized companies to stop evading taxes after finding many Thai firms transferring profits to offshore tax havens.

Deputy director-general Satit Rangkasiri said many large and medium-sized corporations had used services offered by tax-haven countries to "doctor" their books or inaccurately declare taxable income.

For example, one exporter's products had a price of Bt140 apiece, but he exported to a tax-haven country and declared a product price of only Bt100 apiece. The tax-haven country then sold the products to destination countries for Bt140 without tax payment. Thailand was only able to collect tax on the Bt100 sale instead of Bt140, and the country lost tax revenues as a result.

"This violates tax laws. The Revenue Department must be able to collect tax based on actual earnings," Satit warned.

He said the department had identified a number of consulting firms that advised Thai companies to set up businesses in tax-haven countries to circumvent Thai tax laws.

The department will take legal action against the consulting companies and closely monitor the setting up of business units in tax havens in the belief that the move is being made to avoid paying tax.

The Revenue Department's move comes after the government's decision to go ahead with legal action against the family of deposed prime minister Thaksin Shinawatra, accusing Thaksin and his family of tax evasion and corruption. Thaksin is accused of setting up the company Ample Rich in the Virgin Islands, a well-known tax haven, to facilitate the transfer of shares in Shin Corp.

Wichit Chaitrong

The Nation