Supreme Court Rejects Bangkok Airways’ Claim for a Tax Refund

5th Oct 2016

Bangkok Airways’ claim for a 119 million baht refund it paid in land and building tax to Koh Samui municipality has been rejected by the Supreme Court’s Tax Division.

According to the ruling, Bangkok Airways will have to pay 1.16 billion baht of the tax over the 30-year lease term.

In 2006, Bangkok Airways Plc., which operates the airline Bangkok Airways and the Samui International Airport in Koh Samui, set up the Samui Airport Property Fund (SPF) in order to fund the airport’s operations and leased this facility as the Fund’s underlying asset for a period of 30 years and rentals totaling 9.3 billion baht.

The Supreme Court ruled that these rentals should be considered as part of the company’s income as it charged the SPF at 310 million baht per year. Based on this amount, BA would have to pay 38 million baht for land and building tax to the Koh Samui municipality.

Supreme Court Overrules Central Tax Court’s Decision

This changes things dramatically for Bangkok Airways Plc., as this decision by the Supreme Court overrules the previous one made by the Central Tax Court. Last week, BA filed a lawsuit with the Central Tax Court and successfully challenged the tax estimated for the rentals between 2007 and 2010.

However, the Supreme Court disagreed with the Central Tax Court, which previously ruled in favour of the carrier.

In addition, the Supreme Court also ruled in favour of the municipal office’s collection of the tax for the 2011 rentals. The airline previously complained this tax should be estimated at 1.3 million baht.

Mayor of Koh Samui Ramnetr Jaikwang said the Supreme Court’s Tax Division rulings on both cases should enable other administrative organizations to collect the land and building tax from leasing the assets to property funds.

According to Bangkok Airways, however, this ruling will have no impact on its operating results as it already paid the said tax and recorded it in its financial statements.

On Tuesday, BA shares went up 3 per cent to 25.75 baht in trade worth 640.5 million baht.

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• Bangkok Airways

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• Koh Samui Airport

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