Thailand Cracks Down on Land Sales to Foreign Nominees

18 May 2011

Inspection will be increased for land transactions performed in the popular tourist destinations of Thailand’s South, according to a senior official from the Excise Department.

The increased scrutiny is being instituted in effect of tax loopholes created by the process of property developers using Thai nominees to accumulate land and then re-selling that land to another company. This process allows all parties involved to bypass certain applicable taxes. Property sales have particularly taken off in Koh Samui, Phuket and Krabi, reaching over 100% more than a decade ago in some areas.

As foreign nationals are not permitted to own land in Thailand, companies are using Thai nominees to purchase the land. In many situations, the land is then sold off to another company, which allows room for substantial tax evasion.

Tax rates on land sales occurring between individuals and a company are calculated based on the Land Department’s appraisal. On the other hand, company-to-company sales are calculated through the amount of the transaction, which is often higher than the appraisal price determined by the Land Department.  This results in a loss of revenue for the Land Department. The Excise Department has also stated that any transactions occurring through the use of a Thai nominee violates the Thailand Excise Act.

The Excise Department has asked Regional Excise Bureau 11 to update its IT procedures and systems to enable it to increase inspection of nominee transactions. This bureau oversees operations in eight southern provinces. The bureau will look for any transactions that signify an unusual transfer, such as money transferred between three parties. It will then do a comparison between the land appraisal amount and the sale price of the land.

Thailand Looks into Migrant Slavery Case in Bangkok

4 May 2011

In late April, at least 60 Burmese migrant workers were discovered working in a garment factory in Bangkok after being held illegally for months without sufficient wages. Thailand police began investigating the case and are looking into a lawsuit filed by the Burmese Association of Thailand (BAT).

The employers may have to face at least three different charges if they are found guilty, and also might be required to provide past wages to the migrant workers. They may also be liable for 10 years or longer in prison if convicted.

The employers are accused of violations that fall under the Thai labor law, Thai Criminal law and the Human Trafficking law in Thailand. The Human trafficking charge, by itself, requires a minimum of 10 years in jail in Thailand.

The Thai authorities conducted the raid on April 19th in the Ding Daeng area of Bangkok, discovering the nearly 60 Burmese migrants who had been locked up and forced to work in the factory building. Some had been there for as long as eight months.

As the accused employers will likely not hold anything back in their defense, due to the severity of the penalties, an important source of support for the migrant workers should come from their home country.

The Burmese Embassy in Bangkok, once notorious for ignoring the situation of migrant Burmese workers in Thailand has been in contact with BAT to offer assistance.

While the migrant workers wait for the outcome of the case, they are being kept at government operated guesthouses in Pathum Thani and a security guesthouse in Nonthaburi.