Thailand updates tax penalty and surcharge relief framework

The two orders are therefore best read as one coordinated update, covering both the taxpayer and TRD perspectives. 

At a glance 

• Requests for a refund of penalties and certain surcharges already paid must be filed within the statutory tax refund claim period. 
• Businesses that register for VAT late may qualify for full or partial penalty relief, depending on when they correct the position. 
• Relief for surcharges relating to the mid-year corporate income tax (CIT) instalment is now limited to a reduction; a full waiver is no longer available. 
• TRD officials have higher approval limits, while the relief framework now also covers certain online filing errors, including duplicate VAT returns. 

A deadline now applies to refund requests 

A taxpayer that has already paid a penalty and later seeks a refund must submit the request within the statutory period for claiming a tax refund. This applies to penalties relating to income tax, VAT and specific business tax (SBT). The same timing requirement applies to refund requests for surcharges paid in connection with the mid-year CIT instalment. 

This means that having valid grounds for relief may not be enough if the refund request is submitted after the statutory deadline. 

Late VAT registration: earlier correction means greater relief 

A separate relief framework now applies to businesses that carried on VAT-liable activities without registering for VAT. A full penalty waiver may be available where the business registers for VAT within 30 days after exceeding the VAT registration threshold and files and pays the VAT due together with its first VAT return. 

Where the business corrects the position later, or has already ceased operations and therefore does not register, the penalty may still be reduced if the VAT return is filed and the VAT due is paid at the same time. The reduced penalty rate depends on how quickly the non-compliance is corrected: 

The rules therefore give a clear advantage to early voluntary correction. Once a tax officer has identified and documented the issue, the reduced penalty rate increases to 40%. 

Mid-year CIT surcharge relief is more limited 

For non-compliance with the mid-year CIT instalment requirements, the revised rules allow the surcharge to be reduced, but not fully waived. Taxpayers should therefore review the mid-year tax estimate, supporting calculations and filing position carefully, as the remaining surcharge exposure cannot be eliminated entirely under this relief provision. 

How has the TRD’s approval authority changed? 

Where a case meets the relief criteria prescribed by the Director-General of the TRD, senior officials may waive or reduce the penalty without a monetary limit. For cases that fall outside those prescribed criteria, designated TRD offices may still exercise discretion, subject to the following higher approval limits: 

The higher limits allow larger penalty cases to be considered at the relevant administrative level, which should make the relief process more practical, particularly for businesses facing significant VAT penalties. 

Expanded relief for certain VAT errors 

The new order also expands the TRD officials’ authority to approve relief for several VAT-related errors. The main changes are summarised below: 

These changes do not mean that relief is automatic. The taxpayer must still demonstrate that the relevant conditions are met and provide sufficient information for the TRD to consider the request. 

Practical points for taxpayers 

• Check the applicable tax refund claim deadline before submitting a request for a refund of penalties or surcharges already paid. 
• Where possible, correct the non-compliance voluntarily before it is identified and documented by a tax officer. 
• File the relevant return and pay the tax due at the same time where this is required as a condition for relief. 
• Keep clear records explaining how the error arose, when it was identified and what corrective action was taken. 
• Prepare a focused relief application that links the facts of the case to the relevant criteria and approval authority. 

Key takeaway 

The two orders are best read as one coordinated update. Tor.Por. 369/2569 sets out when and how taxpayers may seek penalty or surcharge relief, while Tor.Por. 370/2569 determines which TRD officials may approve the relief and the monetary limits of their authority. Early voluntary correction and a well-supported submission remain important, as relief is subject to the relevant conditions and is not automatic. 

References (in Thai): 

• Revenue department orders No. Tor.Por. 369/2569 and No. Tor.Por. 370/2569. Retrieved from Revenue Department.