THAILAND

Corporate taxation

The standard corporate tax rate is currently 30% but lower rates apply in many cases. The standard rate should reduce to 23% in 2012 and to 20% in 2013 under current proposals announced.

Rental income paid to foreign companies not carrying on business in Thailand is subject to 15% withholding tax.

A capital gain or loss from the sale of Thai real estate by a company shall normally be included in the computation of its taxable net profit in the year of disposal.
 

Personal taxation

Personal tax rates range from 5-37%.

Individuals are normally taxed on rental income on a cash basis. A property owner may claim a standard deduction of thirty percent against rental income. If the property is sub-let, then the rents paid to the original letter or sub-letter may be deductible. A taxpayer has the option of claiming necessary and reasonable expenses incurred in deriving rental income supported by documentary evidence.

The sale of real estate is subject to personal income tax on the official appraised price of the property at the time of sale less deductions stipulated by law.  Some sales may be tax exempt, including the sale of one’s place of residence to purchase a new residence.
 

VAT

The standard VAT rate is 7%.

The sale or lease of immovable property is not liable to VAT. The lease of movable property and the provision of property related services are subject to VAT.

Transfer taxes and fees

Taxes and fees are collected when the transfer of immovable property is registered at the Land Department.

Immovable property sold in a commercial manner or for profit, irrespective of the manner in which the property is acquired, is subject to 3.3% specific business tax. Royal Decree No.342 issued under the Revenue Code specifies which sales of immovable property are subject to specific business tax. If the sale is not subject to specific business tax, stamp duty of 0.5 % may be payable instead.

A fee of 2% is payable on the official appraised price of the property transferred. These prices are reviewed every 4 years and new prices commence in 2012.  

Withholding tax is also collected at the time of transfer. Companies are taxed at 1% and individuals are taxed at the personal tax rates.  
 

Leases

A lease of commercial land or building space is subject to 0.1% stamp duty. The registration of leases at the land department is subject to a 1% fee.
 

House and land tax

House and Land Tax is collected annually on the annual rental value of commercial buildings at the rate of 12.5%. If land is not subject to the house and land tax it may be subject to local development tax. Reforms have been proposed that involve scrapping these two taxes and introducing a new property tax that would be imposed on the official appraised price of the property.
 

Tax exemptions and concessions

There are a number of exemptions and concessions provided under the law. Property funds are exempt from VAT, stamp duty and specific business tax and no tax is imposed on its net profit. Income tax exemptions for first home owners have also been announced.