Thailand: Chevron pays B2bn in tax

Thailand: Chevron pays B2bn in tax

Chevron Thailand Exploration and Production Co yesterday paid back 2 billion
baht to the Finance Ministry, ending a dispute over unclear tax duties, says
a company spokesman.

The sum included excise tax, municipality tax, value-added tax, and levies
for the state Oil Fund and Energy Conservation Fund, said Boonyarit
Srionkong, Chevron Thailand's policy, government and public affairs manager.

Last November, the Finance Ministry set up a committee to probe the Customs
Department's previous excise duty exemption for Chevron, saying it should be
taxed 3 billion baht.

The panel, in tandem with a request from the Council of State, sought to
determine whether Chevron's purchases of oil from Star Petroleum Refining
and transportation to its oil rigs, located on a continental shelf that is
farther than 12 nautical miles from the coast, could be counted as exports,
Finance Minister Apisak Tantivorawong said last year.

Mr Boonyarit said the company agreed to pay back taxes after the Council of
State agreed that oil transported for use on its rigs located farther than
12 nautical miles offshore should be counted as a domestic purchase.

"We agreed to 2 billion baht in taxes, 1 billion less than customs had
earlier calculated," he said. "That was due mainly to a miscalculation, as
they had done their tabulations based on an excise tax on diesel at 5.30
baht a litre, while the fact is that during that period, the excise tax on
diesel was 50 satang per litre."

Mr Boonyarit reaffirmed Chevron's commitment to doing business in Thailand,
saying the company is ready to comply with the law.

Since 2012, oil transported by Chevron to its offshore rigs has been counted
as an export by the Customs Department, with customs officials referring to
Thailand's maritime claim, stipulating that territorial sovereignty does not
exceed 12 nautical miles.

Therefore, oil taken farther than 12 nautical miles from the coast was
counted as an export and benefited from the tax exemption.

But the Revenue Code and Petroleum Act extended Thailand's sovereignty
rights to cover 200 nautical miles of the exclusive economic zone and
continental shelf. Oil transported within the 200-mile radius is thus
counted as an export and subject to a tax payment.

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Link to Original Article:
http://www.bangkokpost.com/business/news/1216797/chevron-pays-b2bn-in-tax

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com