General Taxes in Thailand
Find out about the different taxes that a person may be liable for when living in Thailand...
Value Added Tax
VAT is levied on the sale of all goods and services. The general rate is seven percent. Certain services are zero rated (for example, exports), and others are VAT exempt. VAT registration is compulsory if a company’s annual sales exceed 1.8 million Baht. Voluntary registration may be possible, to enable a company to reclaim VAT paid. VAT returns are filed monthly with payment of the tax due. The tax due is basically the difference between the VAT paid and the VAT collected. A return must be filed even if no VAT has been paid or received in a particular month.
Many documents are liable for stamp duty, for example, loan agreements, share transfer instruments and powers of attorney. Duty may be fixed, or ad valorem, based on the value element of the transaction. Duty stamps must be affixed to dutiable documents at the time of execution, if the document is executed in Thailand, or within 30 days of the date when the document is brought into Thailand.
- More information is available from the Revenue Department
Local Development Land Tax
This tax is imposed on owners or possessors of land, according to the size of the land and its assessed value. Land subject to the land and house tax, small parcels of land for residential and agricultural purposes and certain other categories of land are exempt from this tax.
Land and House Tax
>A person who leases out land or land and buildings, including apartments and condominiums, is subject to Land and House Tax at the rate of 12.5 percent of the actual or assessed rental value, whichever is higher. Owner occupied factories and commercial buildings are assessed for this tax at the same rate, according to the assessed rental value.
In order to reduce their net tax liability, many landlords who lease property, structure such transactions by using several documents rather than a single lease agreement. As much of the rental payment as possible is allocated to a furniture rental agreement and/or service agreement, which is subject to VAT currently at 7 percent, instead of 12.5 percent land and house tax. The tax authorities will accept this, provided the apportionment of rent and services is reasonable.
From time to time, proposals have been made to replace local development land tax and land and house tax with a new tax based on land values and including tax on unused land. No structural or fundamental changes have been made to date.
Excise tax is levied on a variety of goods such as soft drinks and juices, alcoholic beverages, cement, spirits, matches, tobacco products, petroleum products, playing cards, air conditioners, mechanical lighters, marble, granite, etc. This tax also applies to a wide range of businesses including: massage parlours, nightclubs, karaoke bars, cinemas, and racetracks.
Taxation and Death and Gifts of Assets
Inheritance tax came into force in Thailand in February 2016. The tax threshold is 100 million Baht and the tax applies to the excess above that amount. The tax rates are 5% or 10% depending on whether the beneficiary is a close relative of the deceased or not. The tax only applies to assets where the title is registered e.g. land and buildings, shares, motor vehicles, etc. Other fees chargeable e.g. Land Department fees on a transfer of property or stamp duty on a transfer of shares, are still payable in addition to any inheritance tax payable.
Gift tax was also revised in 2016. Gift tax arises on the transfer of certain assets in excess of an annual threshold. The threshold differs, depending on whether the transferor is related to the transferee or not. The tax rates are the same as for personal income tax i.e. 10-35%. Certain assets are tax-exempt.
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