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Taxation (Other)

Thailand - Taxation (Other)


There are a number of taxes used in Thailand that all residents of the country may be liable for and should be aware of. VAT, for example, is commonly used but is at a far lower rate than in the UK. This is applied to a variety of products and services and there is a standard rate of 7%. There are some items which are considered to be exempt from VAT. Newspapers and some categories of books are VAT free, some public transport services and healthcare services do not charge VAT. Education, the services of a lawyer and the services of an accountant should all be VAT free. If you choose to visit a museum or a zoo then there should be no VAT added to the entrance fee and all services offered by a charitable organisation should be VAT free too.

Property taxes are levied in a number of forms. One of these is the Local Development Land Tax. This is applied to those owners who have land and the amount payable is calculated on the size of the land and the estimated value of the property. The purpose of the land will also have a bearing, for example, land that is used for agricultural purposes is exempt. Land and house tax is applied to land or buildings which are rented out. This is a tax of 12.5% on the value of the property and it is also applied to commercial buildings which are occupied by the owner, but based on the potential rental value. In order to reduce liability for this tax some landlords agree to apply some of the rent to furniture rental rather than property rental as the tax for that is at the VAT rate. Rent is not normally subject to VAT.

There is no inheritance tax or gift tax applied in Thailand but there are transfer fees applicable for those who receive gifts. In many cases the recipient will be liable for income tax on a gift. There is also no separate system of capital gains tax in Thailand.

If you receive dividends from a company you are entitled to a tax credit. The tax credit that is received can be offset against the total tax liability of your income. Some registered companies will withhold a certain amount before they pay out a dividend and this is usually at a rate of 10%. In this instance there is no need to include this when calculating their own income tax. Some companies do not withhold tax and therefore this amount will need to be included on a tax return.

If an individual sells property then there are a number of taxes involved. There is a 2% transfer fee based on the value of the property as stated by the land office and not on the sale amount of the house. This is one of the taxes that is used instead of capital gains tax.

Income tax which is payable in place of CGT can be at a varying rate depending upon the amount of money involved. It can be anything between 10 and 37%. However, if the property has been given to the seller in the form of a gift or any kind of inheritance then there are fixed rates of expenditure which can be offset against the tax owed. The rates will vary according to how long the property has been owned. As the regulations on this are fairly complicated it is advised to seek legal and professional accountancy advice so that you can be sure you are paying the correct amounts and the correct type of taxes.

In addition to the taxes already mentioned there are several others which may affect you. Stamp duty is payable on certain documents and this need be paid when the document is executed. Rates will vary according to the type of document. There are also excise taxes which are payable on various different goods such as alcohol, tobacco and even cement and playing cards. This tax is also applied to businesses such as nightclubs and cinemas. Excise tax should be built into the price of the item or service so you will not be paying extra charges at the point of sale.


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