Expatriate tax ebook - Thailand

What taxes?

Capital gains tax
Inheritance, estate and gift taxes
Investment income
Local taxes
Real estate taxes
Social security taxes
Stock options
Wealth taxes
Other specific taxes

Capital gains tax
There is no capital gains tax in Thailand. Income arising from the transfer of shares and properties is considered ordinary income, and is included in the calculation of income tax. Capital gains arising to individuals from selling stock on the Thailand stock market are exempt.

Inheritance, estate & gift taxes
Estate duty is levied on the principal value of property situated in Thailand which passes, or is deemed to pass, on the death of an individual.

There is no gift tax in Thailand.

Investment income
Generally investment income is aggregated with other types of income and subject to tax based on the tax rates set out above. Non-resident expatriates are granted tax exemption for interest income derived from commercial banks which are depositors or lenders for overseas deposits or loans (otherwise known as “out-out business”). This new regulation took effect on 18 April 2006.

Local taxes
There are no local taxes imposed on individuals in Thailand.

Real estate tax
Sale of land or other real estates

There is a land registration fee of 2% of the official assessed value. The liability for this tax is shared equally by the seller and buyer. For specific transfers, the rate is temporarily reduced to 0.01% where such sale or transfer occurs within 1 year starting from 29 March 2008.

Rental income

It is a general practice in Thailand for the lessor to prepare several agreements with a new tenant primarily because of the 12.5% house and land tax and VAT at 7%.

• House and land tax is 12.5% based on the assessed annual value or rentals, whichever is higher.
• Registration fee of 1% based on rentals as provided in the lease agreement. This applies to agreements with lease period of more than 3 years.
• Lease of immovable property is exempt from VAT whereas rental of furniture and the provision of other property related services are subject to VAT. The VAT (7%) is passed on to the lessee.

Real estate taxes on rentals are the liabilities of the landlord. Thus, unless there is an agreement to the contrary, it will not affect expatriates who are working in Thailand.

Social security taxes
Employees between the ages of 15 – 60, and their employers, must make monthly contributions to the social security fund.

The current rate is 5%, up to a maximum contribution of THB750.

Stock options
Gains from exercising company stock options are taxable as employment income.

Wealth tax
There is no wealth tax in Thailand.

Other specific taxes
There are no other specific taxes relevant to expatriates in Thailand.

Information about Thailand:

• introduction
• facts and figures
• basis of taxation
• what taxes?
• tax planning opportunities