THAILAND Law and Practice Contributed by: John Frangos, Nuanchun Somboonvinij, Santhapat Periera and Niti Muangkote, Tilleke & Gibbins
1.2.4 Registration, Filing and/or Consent From Government Entities A bill of sale is not required to be registered or filed with any government entity to become effective under Thai law. There is no prerequisite that a bill of sale be delivered in relation to an aircraft in Thailand under Thai law. 1.2.5 Taxes/Duties Payable Upon Execution of a Bill of Sale Apart from the general tax regime (which can include income tax, VAT, stamp duty and import duties), a bill of sale is not subject to a specific tax or stamp duty under Thai law. Subject to complying with the applicable laws, oper - ating, wet and finance leases will be recognised and permissible, if, and to the extent that they are not con - trary to Thai law or public order in Thailand or good morals. However, for wet leases, an air operator has to obtain permission from the Civil Aviation Author - ity of Thailand (CAAT). The air operator will have to submit an application in line with the Notification of CAAT regarding Criteria for the Use of Aircraft under the Wet Lease and Use of Aircraft under the Code Share Agreement by Air Operator. In granting permis - sion, the CAAT will rely primarily on the criteria set out in the Notification. 2.1.2 Application of Foreign Laws The parties may agree for a lease to be governed by a foreign law. However, according to Thailand’s Act on Conflict of Laws BE 2481 (1938), the foreign law will only be applied to the extent that it does not contra - dict public order in Thailand or good morals. In addi - tion, the party seeking to enforce the foreign law must prove that to the satisfaction of the Thai court. If they do not, Thai law will apply. In any event, the lease and relevant agreements/documents must be legal, valid, binding and enforceable under the foreign law and/ or Thai law if they are to be legally enforced in Thai - land. They must also be in the forms prescribed by 2. Aircraft and Engine Leasing 2.1 Overview 2.1.1 Non-Permissible Leases
the foreign law and/or Thai law to be legally enforced in Thailand. In relation to property or assets, please note Sections 9 and 16 of the Act on Conflict of Laws. Section 9 states: “Unless otherwise provided by this Act or other laws of [Thailand], the formal validity of a juristic act shall be governed by the law of the coun - try where the act is made. However, the law of the country where a property is situated governs the form required for the validity of a contract, document or other juristic act relating to immovable property.” Section 16 states: “Movable and immovable property is governed by the law of the place where the prop - erty is situated. However, in the case of exportation of movable property, the law of nationality of its owner shall govern from the time of exportation.” 2.1.3 Restrictions Concerning Payments in US Dollars No material restrictions are imposed on domestic les - sees making rent payments to foreign lessors in US dollars. However, the domestic lessees must comply with, inter alia, the Thai exchange control, tax and anti-money laundering laws/regulations. The domestic lessees must also be able to provide documentary evi - dence for the transfer to the authorised juristic person or licensed financial institution. 2.1.4 Exchange Controls Exchange controls in Thailand are primarily governed by the Exchange Control Act BE 2485 (1942) (as amended) and Ministerial Regulation No 13. Outward remittances for rent payments under, and according to, a valid lease are permitted, provided that proper documentary evidence for the payment is submitted to the authorised juristic person or licensed financial institution. 2.1.5 Taxes/Duties Payable for Physical Execution of a Lease A lease agreement for movable property (eg, an air - craft) is not subject to stamp duty. However, where the lease of an aircraft is regarded as a hire purchase agreement, it will be subject to stamp duty at a rate of Thai baht that is equivalent to 0.1% (ie, THB1 for
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