Bangkok Airways has been dealt a second blow in its court battle with the Koh Samui municipality over a land tax dispute for Samui airport.
The Supreme Court yesterday ruled the SET-listed airline is not entitled to get back 119 million baht in tax rebates plus interest paid between 2007 and 2010.
The airline also lost a Supreme Court ruling on Sept 30 over 38.8 million baht in land tax paid in 2011 that the carrier claimed should be refunded.
The court yesterday ruled in the municipality's favour because Bangkok Airways has leased the airport to Samui Airport Property Fund for 30 years for a combined fee of 9.3 billion baht. That translates to 310 million baht in annual fees, which forms the basis for the building and land tax calculation, resulting in tax payable of about 38.8 million baht a year.
The Supreme Court ruling, which reversed a Central Tax Court judgement, means Bangkok Airways is subject to pay 1.16 billion baht in tax to the municipality over the entire 30-year period.
That will create a sizeable financial burden for the airline and the Fund, which was registered on Nov 22, 2006 to operate the airport.
But Bangkok Airways executives told the Bangkok Post yesterday the issue will not affect its balance sheet as this tax payment will be recorded as an expense when incurred. The airline made 1.42 billion baht in net profit in the first half this year, up from 1.16 billion year-on-year.
Samui mayor Ramnetr Jaikwang told reporters the rulings on both cases are a benchmark for other local administrative organisations that collect building and land taxes from the lease of assets to mutual funds.
Samui airport has been a cash cow for Bangkok Airways, serving as its prime hub for aircraft movements. The airport will undergo an upgrade to streamline operations with a budget of 1 billion baht.