VAT is levied on the sale of all goods and services. The general rate is seven percent. Certain services are zero rated, and others are VAT exempt. VAT registration is compulsory in certain cases, for example if a company’s sales exceed 1.8 million Baht in an accounting period. VAT returns are file monthly with the tax due. The tax due is basically the difference between the VAT paid and the VAT collected.
Certain documents are liable to 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.
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.
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 taxes are 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.
In 2003, excise tax was extended to a wide range of businesses including: massage parlours, nightclubs, karaoke bars, cinemas, and racetracks.
There is no death duty or inheritance tax in Thailand, although transfers of land and buildings or shares upon death or by gift are subject to transfer fees and stamp duty. Gifts are not tax exempt; depending on individual circumstances the person who gives the gift or the person who receives the gift may be subject to withholding tax and income tax.
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