Specific Business Tax Payable on Loans to Directors
The Supreme Court has ruled that where a company lends money to its director on a regular basis without interest charge the transactions will be considered similar to that of a commercial bank. Thus, the company is liable to pay Specific Business Tax (‘SBT’) and the Revenue Department Officer has the authority to set an appropriate rate of interest.
Keywords: Thailand, Tax, Revenue Department, SBT
Mazars note that companies need to be careful not to lend money to directors on a regular basis otherwise the transactions might be considered an activity for which SBT is applicable.
Supreme Court Decision No. 749/2553