Understanding Thai Tax Laws: An Overview of Taxes Affecting Foreigners.
Kelmer Tax Services in Bangkok provides a comprehensive range of tax solutions tailored for both individuals and companies. Our dedicated team excels in strategic tax planning, offering valuable insights into the ever-evolving landscape of tax laws, regulations, and double tax treaties.
We go the extra mile to defend against tax assessments and skillfully litigate tax claims on your behalf. With expertise spanning income tax, VAT, specific business tax, stamp duties, customs duties, excise tax, inheritance tax, land and buildings tax, and other emerging tax laws, we ensure you stay ahead of the curve.
Trust us to navigate the complexity of tax regulations in Thailand, and we will deliver personalized and effective solutions for your business.
This brief summary of taxes will give you an overview of the various taxes that foreigners are subject to under Thai laws.
Personal Income Tax (“PIT”)
The source rule applies to foreigners who earn Thai-sourced income, and thus, are subject to PIT in Thailand, whether or not such income is paid in Thailand.
The residence rule applies to foreign-sourced income, depending on the status of the foreigner as a tax resident in Thailand or not.
The Gift Tax is a particular type of PIT for which the above source rule and/or residence rule also apply. In this case, a foreigner receiving movable properties (cash, car, jewelry, etc.) from an ancestor, a descendant, or a spouse as a sustentation, support, or gift, will be subject to a 5% Gift Tax on the portion exceeding 20 million THB, in each tax year.
Withholding Tax (“WHT”)
Certain types of income shall be subject to Withholding Tax (“WHT”). The duty to deduct the WHT from a tax resident or a non-tax resident rises at the time a payment is made.
Eventually, the WHT rate may also be reduced or exempted in case of a Double Taxation Agreement (“DTA”) being in place between Thailand and the country where the foreigner is a tax resident, or in case other domestic Laws are applicable i.e., the Investment Promotion Act.
Value Added Tax (“VAT”)
Any foreigner who regularly sells goods or provides services in Thailand and whose annual revenues exceed 1.8 million THB shall register for Value Added Tax (“VAT”) before the starting of business operations or within 30 days of the earnings reaching the threshold of assessable income.
Importers are also subject to VAT in Thailand, no matter whether they are VAT registrants or not. In this case, VAT shall be collected by the Customs Department at the time of the goods being cleared at customs for import.
Specific Business Tax (“SBT”)
Any foreigner who sells or transfers an immovable property within 5 years from the date of acquisition shall be subject to a Specific Business Tax (“SBT”) at a rate of 3.3% (including a 10% local tax) of the appraised value or sale price, whichever is greater, at the time of registering the transfer at the Land Office.
Stamp Duty (“SD”)
The execution of certain instruments is subject to a Stamp Duty (“SD”), which can be affixed or paid by cash at the Revenue Office or via the e-stamp duty system on the website of the Thai Revenue Department, depending on the case. These instruments include rental of land or building, transfer of shares, transfer of immovable property, hire of work, loan of money, power of attorney, guarantee, and duplication of an instrument.
The SD rate is fixed or may be calculated as a percentage of a specific value according to the transaction.
Any foreigner who is domiciled in Thailand under the Immigration Law shall be liable to pay Inheritance Tax within 150 days from the date the net inheritance value from each testator exceeds 100 million THB, together with the tax payment. In case the beneficiary is an ancestor or a descendant of the testator, a rate of 5% applies to the net inheritance value (the inheritance value received after deduction for any liabilities) exceeding 100 million THB from each testator. In other cases, a rate of 10% applies to the net inheritance value exceeding 100 million THB.
Land and Building Tax (“L&B Tax”)
Any foreigner being the owner of a land, building or condominium unit (“owner”) in Thailand shall be required to pay a Land and Building Tax (“L&B Tax”) within April of each year.
ILCT offers a wide range of services encompassing all taxes relating to business and industry, for companies and individuals. These include tax planning, interpretation of tax laws, regulations and double tax treaties, defending tax assessments and litigating tax claims.
To know more: ILCT-Taxation for foreigners under Thai laws
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