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Tax Laws in Thailand

Taxes for Buying and Selling Property in Thailand

Every person residing in Thailand, regardless his/her nationality shall be responsible to pay taxes and fees when buying or selling property.  These taxes and fees are as follows:

 

1.  Transferring Fee :

The Transferring fee is 2% of the registered value of the
property.  Whether, the buyer or the seller is paying for
this fee, is depending on the Sale and Purchase Agreement. Normally
the buyer partly pays for this fee.  This fee will be paid
to the officer at the land office, upon the day of the transfer of
ownership.

2.  Stamp Duty :

Buyer or seller is subject to a 0.5% Duty Stamp from either the
appraised value of the property or actual purchasing price, whichever
is higher.  The parties reliable for this additional 0.5% of
Stamp Duty can be agreed in Sale and Purchase
Agreement.  Stamp Duty is to be imposed unless the Specific
Business Tax (SBT) is paid.

3.  Specific Business Tax (SBT) :

SBT will only be imposed if you are selling your property, which you
have own less than a period of five years.  The tax rate is
3.3% of the selling or assessed price of an asset (whichever is
higher).

4.  Withholding Tax :

Individuals selling their property: the withholding is
determined under to Revenue code of Thailand.  The seller
shall withhold such tax and pay to the Revenue Department, when he/she
earn an income from the sale of immovable property (including
condominium unit).  Withholding tax rate are calculated
based from government assessed price with a deduction of possession
year, which are varied depending on the year of your possession (the
more years of possession, the more the deduction) and calculate that
amount based on the income form the progressive tax rate (range from 0
- 37%).

Company selling their property : the withholding tax of 1%
from appraised value of property or actual selling price, whichever is
higher, must be paid by the Seller.

However, there are no property taxes as such in Thailand that are
exactly equivalent to the property taxes in the West. Commercial
properties incur a small tax which is collected infrequent.

In term of registering a lease agreement, a registration of a lease
for duration of more than 3 year required to pay a registration fee
rate of 1% plus a 0.1% rate of stamp duty.  Rates are
calculated from the total amount of the rental fee or the key money or
both.

Thailand Property Taxes

Transfer fee :

2% of the registered value of the property.

Stamp Duty :

0.5% of registered value.  Only payable if exempt
from business tax.

Withholding tax :

1% of the appraised value of the property.

Business tax :

3.3% of the appraised value of the property if selling within 5 years.
This applies to both individuals and companies.

TAX WHICH PARTY NORMALLY PAYS AMOUNT
Transfer Fee Buyer 2% of Registered value
Stamp Duty Seller 0.5% of Registered value
Withholding Tax Seller 1% of appraised value
Business Tax Seller 3.3% of appraised value

Tax and Cost Calculation for Transferring Property

Example of how to calculate the taxes and cost

–  Suppose that the government assessed price is Baht
50,000 per Sq.m.

–  All areas are 100 Sq.m.

–  The total assessed price is Baht 5,000,000

–  Actual selling price is 6,000,000

–  The Seller possessed this property for 3 years

1.   Withholding Tax :

The government assessed price = 5,000,000 Baht

Deduction with the expense of possession for 3 years for 77% =
3,850,000

Balance = 1,150,000 (5,000,000 - 3,850,000)

Divided by the 3 year of possession Balance = 383,333.33 (1,150,000/3)

Taxation on progression rate

1 to 80,000 = exempt

80,001 - 100,000 = 5% (1,000)

100,001 - 383,333.33 = 10% (28,333.23)

Total = 29,333.23 (1,000 + 28,333.23)

Multiply by the year of possession = 87,999.69 (29,333.23 x 3)

In this case withholding tax is Baht 87,999.69  (A)

2.  The government fee of transfer of ownership :

Is 2% based on the government assessed price so 5,000,000 x 2% Balance
= 100,000

Transfer fee is 100,000  (B)

3.  Stamp duty :

in this case is exempt.  This is because transaction is
subject to the specific Business Tax (possession of less than 5 year
before sale).

4.  Specific Business Tax :

3.3% for Specific Business Tax based on the government assessed price
or sale whichever is higher.  In this case sale price is
higher than government so 6,000,000 x 3.3% = 198,000.

Specific Business Tax is Baht 198,000  (C)

Total expenses are Baht 385,999.69 (A+B+C)

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