Stamp Duty Risks in Court Proceedings

Pursuant to Section 118 of the Thai Revenue Code (“TRC”), in order for any instrument (as defined below) to be accepted as evidence, a stamp duty must be affixed to it. However, the Supreme Court of Thailand recently ruled that although a stamp duty had not been affixed to the instrument in question (a loan agreement), the existence of evidence demonstrating an acknowledgment of debt through the loan agreement allowed it to be used as evidence in the case.

Specifically, Supreme Court Judgment No. 893/2568 stated that although the required stamp duty was not affixed to the written loan agreement, and therefore it could not be used as evidence in a civil action pursuant to Section 118 of the Revenue Code, the two sheets of micro-paper as the attachments of the loan agreement which set forth a loan repayment schedule for the loan amount of THB 730,000 (i.e., the principal repayment of THB 29,000 along with 25 installments of interest payment, as well as the total principal and total interest) may be used as evidence.

Furthermore, at the first hearing, the defendant expressed its intention to repay the debt to the plaintiff, and at the subsequent hearing, the defendant stated that it did not wish to contest the case. Therefore, the fact that the defendant borrowed the money and defaulted on the repayment as claimed by the plaintiff was established. Accordingly, the court rendered its judgment and ordered the defendant to pay the plaintiff as requested in the complaint.

According to the Supreme Court judgment, the key elements are as follows:

1. What is the instrument?
2. Is the acknowledgment of debt document subject to stamp duty?
3. How to proceed if the stamp duty has not been affixed?

1. What is an instrument?

An “instrument” is any document that parties agree upon and is required to be executed by the parties, meaning that it must be signed by the parties in accordance with Section 9 of the Civil and Commercial Code (CCC), which will be subject to a stamp duty under Section 103 of the TRC. In the case above, the instrument was the loan agreement. If the lender and borrower agree to the loan agreement, the agreement constitutes the instrument, which is subject to a stamp duty at the rate of 0.05% of the amount of the loan principal, which is capped at THB 10,000. Additionally, if it is required to present the agreement (instrument) to the court, a stamp duty shall be affixed to the agreement at the rate stipulated in the Stamp Duty Schedule in connection with Section 118 of the TRC.

2. Is the acknowledgment of debt document subject to stamp duty?

Section 653, paragraph 1 of the CCC provides that for loans in an amount exceeding THB 2,000, there must be a written acknowledgment of debt signed by the borrower. However, such acknowledgment does not constitute an instrument under Section 103 of the TRC, and as such, is not subject to a stamp duty. 

3. How to proceed if the stamp duty has not been affixed to the instrument?

In Supreme Court case no. 893/2568 (2025), the plaintiff failed to affix the stamp duty to the loan agreement, which resulted in the plaintiff being deemed to have no documentary evidence. This was also supported by Supreme Court case no. 1650/2567 (2024), which ruled that a loan agreement to which a stamp duty had not been affixed could not be used as evidence. Accordingly, the plaintiff was deemed to have no written evidence of the loan, and therefore could not file a lawsuit under Section 653, paragraph 1 of the CCC.
Therefore, the situation above can be handled as follows:

• 3.1 A stamp duty can be affixed to the instrument before filing an action with the court. This is supported by the Supreme Court case no. 1234/2501 (1958).
• 3.2 During the court hearing, the court can be requested to affix a stamp duty to the instrument or to cancel the stamp duty affixed to the instrument, and the court must comply with this request. This is supported by Supreme Court cases no. 1286/2522 (1979) and 1873/2493 (1950) (where such a request was made while the plaintiff was finishing its court hearing process). However, if no such request is made, the court may dispense with the case. This is supported by Supreme Court case no. 303/2532 (1989).

Please note that the parties must request that a stamp duty be affixed to an instrument prior to the court rendering its judgment. Failure to do so will result in the court not accepting the instrument (agreement) as evidence and dispensing with the case. This is supported by Supreme Court cases no. 5714/2552 (2009), 3775/2546 (2003), 5013/2541 (1998), and 2049/2528 (1985).

This article is intended to provide a regulatory overview only, and does not provide a comprehensive analysis or constitute legal advice. Should you have any questions on this or on other areas of tax law, please do not hesitate to contact our Tax Team at SCL Nishimura & Asahi Limited.

Punjaporn Kosolkitiwong
Partner

Areeya Ananworaraks
Counsel

Nuttanicha Pansottee
Associate

Pairaya Yangpaksi
Associate

Authors