The Problem of Tax Arrears Collection under Section 12 of the Revenue Code: A Study of Limited Companies

Abstract

The objective of this study is to examine the laws related to the collection of tax arrears, with a focus on the case of limited companies in Thailand and comparative studies of foreign jurisdictions, namely the United Kingdom, New Zealand, Australia, and India, as well as the Thai Revenue Code. The study found that the Revenue Code should be amended to authorize the Director-General of the Revenue Department to file a lawsuit requesting that a company director be ordered to pay outstanding tax liabilities in place of the juristic person, in cases where the director has intentionally acted to evade taxes. Such acts include fraud or deceit to avoid tax payment, concealing or distorting financial information, preparing false reports, allowing insolvency to avoid tax liability, continuing operations despite knowing the company cannot pay taxes, or violating tax laws or enforceable orders.

Liability should also arise from gross negligence, such as failure to supervise or manage the company leading to tax arrears, abuse of authority for personal gain, or failure to prevent tax-related damage. In all cases, the director shall be liable only when the Revenue Department can prove the conduct falls within the specified legal criteria.