In Thailand, a merger is a statutory process of two or more companies merging together to form a new "amalgamated" company.
The Statutory Process
Under the prescriptions in the Civil and Commercial Code:
All the assets, liabilities, rights and obligations of the merging companies transfer to a new amalgamated company;
The merging companies dissolve; and
The shareholders of the merging companies receive shares in the new amalgamated company proportionately to the shares they held in the merging companies.
The Tax Treatment
Under the prescriptions in the Revenue Code:
For the shareholders of merging companies receiving any benefit from the transferring of their shares in the merging companies to shares in the new amalgamated company
Exemption from income tax
For the merging companies transferring assets, liabilities, rights, obligations to the new amalgamated company
Exemption from income tax
For the merging companies transferring movable assets to the new amalgamated company
Exemption from value added tax
For the merging companies transferring immovable property assets to the new amalgamated company
Exemption from specific business tax
For the executing of instruments that are required in connection with the merger
Exemption from stamp duty tax
The Revenue Department's Conditions
The conditions prescribed by the Revenue Department are as follows:
The merging companies shall be public companies or private companies incorporated under Thai law;
The merging companies shall not owe the Revenue Department any arrears of tax on the date of the merger unless a bank guarantee or other collateral is provided for the arrears of tax;
The new amalgamated company shall file a notification with the Revenue Dept informing details of the merger within 30 days of the transaction; and
The transaction shall be undertaken according to the statutory process for mergers under the Thailand Civil and Commercial Code.
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