THAILAND Law and Practice Contributed by: Jessada Sawatdipong, Sarunporn Chaianant, Supawich Nimmansomboon and Supawin Pongthananikorn, Chandler Mori Hamada
• the total value and criteria used for determining the transaction’s total value. It is important to note that the disclosure requirement is not applicable where the listed company holds at least 90% of the total share capital of the affiliate. Reporting Obligations in Relation to Anti-Money Laundering Laws Under the Anti-Money Laundering Act B.E. 2542 (1999), Thai financial institutions are required to report to the Anti-Money Laundering Office (AMLO) a transaction that involves real property and machinery worth more than THB5 million. In respect of project financing transactions, execution of mortgage agree- ments (land/building/machinery) is usually required to be reported to AMLO, since the mortgage amount or transaction value would typically be the amount of the loan facility, which would be higher than THB5 million. Upon entering into a mortgage agreement, financial institutions, including commercial banks, finance companies, securities companies, insurance com- panies and other business related to finance, are required to report to AMLO the following information: • transaction type; • date and relevant parties to the agreement; • details of the property; and • value of the transaction (mortgage amount). Interest, other fees, expenses, charges, penalties and other payments made to an offshore lender are gener- ally subject to a withholding tax of 15%. However, the withholding tax may be reduced or waived by virtue of a tax treaty between Thailand and the resident country of the relevant lender. 4.2 Other Taxes, Duties, Charges or Tax Considerations The payment of stamp duty on the following financing documents is a condition of entry into civil proceed- ings before the Thai courts: 4. Tax 4.1 Withholding Tax
• loan agreements – stamp duty of THB1 for every THB2,000 or a fraction of the total amount of the loan, but not exceeding THB10,000; • guarantee agreements – stamp duty of THB10 of the total guaranteed amount exceeding THB10,000; • pledge agreements – stamp duty of THB1 for every THB2,000 or a fraction of the total amount of the loan, without limitation (note that if the loan agree- ment, which is a principal obligation, has been affixed with stamp duties, the relevant pledge agreements are not required to be affixed with the stamp duty); and • nominal duty on duplicates of dutiable instruments. Stamp duties are required to be affixed within 30 days of bringing the document into Thailand if it is signed abroad, or within 15 days if it is signed in Thailand; otherwise, penalties will be applied for the late stamp- ing. Furthermore, a dutiable instrument without a stamp cannot be admitted as evidence in Thai courts. Additionally, the following fees apply to the registra- tion of certain securities under Thai law with the rel- evant government body: • mortgage registration for land and/or building mortgage – 1% of the mortgage amount but not exceeding THB200,000; • machinery mortgage registration – THB1 per THB1,000 of the mortgage amount but not exceed- ing THB120,000; and • BSA registration – 0.1% of the secured amount but not exceeding THB1,000, except for the registra- tion of security over land, where the fee shall be equivalent to the land mortgage registration fee. 4.3 Foreign Lenders or Non-Money Centre Bank Lenders There are generally no other tax concerns for foreign lenders apart from withholding tax, as mentioned in 4.1 Withholding Tax . It should be noted that the tax treatment does not differ between money centre banks and non-money centre banks, or any foreign financial institutional lenders, under the Revenue Code. However, cer- tain international financial organisations, such as the
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