LEGAL PROBLEMS REGARDING INCOME TAX FOR FOUNDATIONS : IN COMPARATIVE ANALYSIS BETWEEN THAILAND AND THE UNITED STATES OF AMERICA

Abstract

The first legal problem of collection of income tax from foundations is caused by the classification of this type of juristic person. According to Thai Internal Revenue Code, there are two types of foundations; the tax exempted foundation and non-tax exempted foundation. This causes confusion among the organizers of foundations. Due to the Declaration of Ministry of Finance (No. 531), such inappropriate requirements also pose significant problems for foundations to be qualified as the tax exempted foundations. This results in a huge number of foundations which practice with nonprofit purpose cannot obtain the tax exemption status. In addition, any foundation organizes activities to raise funds is subject to pay tax under Section 40 (1)- (8) of Thai Internal Revenue Code, be calculated on gross income base, not net profit base like any other juristic person.

                 This thesis surveys on the legal problems of  income tax for foundations in comparison  between Thai and  the United States Internal Revenue Code. This study finds that Thai Internal Revenue Code is more problematic than the U.S. version, especially, those requirements for foundations to enter into to be qualified for income tax  exemptions. Such unfair and inflexible   requirements burden the foundations to comply with. Therefore, there should be consideration to revise and provide suitable guidelines for foundations which have a real purpose of being non-profit organization.