Supreme Court cites four key points in ordering Thaksin to pay 17.6bn baht tax bill
Thailand’s Supreme Court has overturned lower-court rulings and ordered former PM Thaksin Shinawatra to pay 17.6bn baht in taxes from the Shin Corp share sale, ruling he used his children as nominees and violated tax principles.
The Supreme Court on Monday ordered former prime minister Thaksin Shinawatra to settle a long-disputed 17.6-billion-baht tax bill in the controversial Shin Corp share tax case, overturning earlier verdicts by the lower courts.
The court ruled that the Revenue Department’s assessment of the tax arising from the Shin Corp share sale was lawful.
The verdict can be summarised across four key issues:
Issue 1: No need for a new Constitutional Court ruling
The Supreme Court’s Taxation Division noted that the Constitutional Court has already ruled that the announcement of the Council for Democratic Reform under Constitutional Monarchy (CDRM) did not conflict with the 2007 Constitution.
Since Thaksin requested that the Constitutional Court reconsider the same issue under the 2017 Constitution, the Supreme Court held this was a repetitive request and saw no grounds to refer the matter again.
Issue 2: Revenue officers lawfully summoned Panthongtae and Pintongta
The court found that Revenue officers legally summoned Thaksin’s son and daughter — Panthongtae and Pintongta Shinawatra — within the time limits of Section 19 of the Revenue Code.
Both were considered income earners liable for personal income tax from the Shin Corp share transaction, and under Section 797 of the Civil and Commercial Code, they were acting as agents on behalf of Thaksin.
Therefore, any legal act they undertook in relation to the shares bound Thaksin as principal.
Issue 3: Massive price discrepancy proved taxable income
Panthongtae and Pintongta purchased 329,200,000 shares of Shin Corp from Ample Rich Investment Ltd. at 1 baht per share, even though the market price that day on the Stock Exchange of Thailand was 49.25 baht.
They then sold those shares on the same day to the Temasek group at 49.25 baht per share.
The court ruled that no reasonable commercial basis existed for Ample Rich to sell shares at 40 times below market value, and therefore the transaction generated assessable income.
This gave Revenue officers full authority to summon and assess tax on the two agents, and by extension, on Thaksin as the undisclosed principal.
The court accepted that Thaksin had 15,883,900,000 baht of assessable income for the 2006 tax year, and the Revenue Department had the authority to collect the corresponding personal income tax.
Thus, the tax assessment was lawful.
Issue 4: Using nominees showed “lack of tax integrity”
The Supreme Court found that Thaksin’s use of nominees — including his own children — to hold shares on his behalf was an act that “lacked tax integrity” and violated the intent of tax law.
The practice resulted in the state being unable to collect tax correctly, and the court held that the arrangement had no legitimate economic purpose other than obtaining undue benefits, including avoiding income tax.
The judges described the transactions as seriously unlawful, and thus found no grounds to waive or reduce surcharges and penalties.
With this ruling, Thaksin is now legally obligated to pay the full 17.6 billion baht tax bill, including penalties and surcharges, to the Revenue Department.
