Thailand is set to forge a shared anti-tax-dodging agreement with the US this year by implementing the Foreign Account Tax Compliance Act (Fatca), says the Revenue Department.
Director-general Sutthichai Sangkamanee said negotiations between the Thai and US governments had already reached a conclusion despite earlier concerns that the May 22 military takeover might stall the talks and cause Thai institutions to be liable to 30% withholding tax on their revenue from US sources.
The Revenue Department will forward the negotiation results to the government for enactment, he said.
Fatca is a US federal law requiring Americans including ones living abroad to report their financial accounts held outside the country, and foreign financial institutions must report on their American customers to the US Internal Revenue Service.
It requires the Thai Revenue Department and US Treasury to share the financial information of customers of both nationalities at financial institutions including banks, mutual funds and life insurance firms to prevent tax avoidance in offshore markets.
Some other 80 countries are also in talks with the US to comply with the legislation.
The government-to-government agreement and won approval from the previous Pheu Thai-led government.
It has been classified as a priority of the ruling National Council for Peace and Order (NCPO).
Other tax-related issues on the NCPO's priority list include a royal decree making personal and corporate income tax cuts permanent instead of expiring this year.
The NCPO is also looking at extending the current 7% value-added tax (VAT) levy for another year when it expires at the end of September.
Without the approval, VAT would be raised to 10%.
The Yingluck Shinawatra government temporarily lowered corporate income tax to 20% from 30% as well as personal income tax to help middle-income earners pay less tax.
The lowest tax rate among income earners is now 5%, half the previous rate, while the highest rate has also been trimmed to 35% from 37%.
Moreover, personal income tax rates have been expanded to seven categories from five.
Mr Sutthichai said the current rate for Thai corporate income tax was the second lowest after Singapore's 17%.
The private sector should not purposely underestimate their revenue to avoid paying taxes now that the government has cut the rates, he said.