By Stephen Frost, Bangkok International Associates Ltd.
In this article, we summarise recent changes in taxation and incentives to stimulate the property market in Thailand.
1. Tax amnesty and waiver
A conditional form of tax amnesty/waiver has been made available.
Who may claim the amnesty/waiver? Entities that may claim the amnesty/waiver are companies or other legal entities whose income does not exceed 500 million baht for the previous accounting period ending 31 December 2015 or before.
Which taxes does the amnesty/waiver apply to? The amnesty/waiver only applies to corporate income tax, VAT, specific business tax and stamp duty.
Nature of the amnesty/waiver: All tax audits, investigations, tax assessments, payment enforcement for taxes, and criminal sanctions under the Revenue Code are waived for all accounting periods beginning before to 1 January 2016, or for a tax base incurred, revenue derived, and instruments executed prior to 1 January 2016.
Conditions to claiming the amnesty/waiver: To claim the amnesty/waiver, a taxpayer must not:
Further conditions: Note these conditions to entitlement:
Consequence of breach of conditions: Where the amnesty /waiver has been claimed, but the benefits have been subsequently withdrawn, the benefits will be deemed never to have been given. The Revenue Department may carry out any audit or assessment.
2. Temporary reduction of Land Department fees
The Land Department fees to register a transfer of land/buildings/condominiums or a mortgage have been reduced from 2% of the official value to 0.1%.
The reduction only applies to registrations made at the Land Department on or before 28 April 2016.
3. Income tax relief for individual purchasers of property
An individual taxpayer may deduct 20% of the purchase price of a condominium unit or a building with land from their personal income tax for five consecutive tax years, subject to the following conditions:
4. Reduced tax rates for SME businesses
The corporate tax rates for small and medium-sized enterprises (SMEs) have been reduced as follows:
Definition of SME: A SME for this purpose means a company or juristic partnership whose paid-up capital at the end of the accounting periods does not exceed 5 million baht, or revenue from the sale of goods and the provision of services in the accounting periods exceeding 30 million Baht.
Who may claim the reduced rates? Companies and juristic partnerships registered before 1 January 2016 whose paid-up capital at the end of the accounting period does not exceed 5 million baht; and whose revenue from the sale of goods or the provision of services in the accounting period does not exceed 30 million Baht.
The tax rate changes: The tax rate changes are as follows:
Conditions to claiming these reduced rates: To claim these reduced rates the taxpayer must notify the Revenue Department of its eligibility to receive the benefits under the tax amnesty/waiver (see above) and such benefits must not have been withdrawn.
Bangkok International Associates is a general corporate and commercial law firm. For further information, please contact Stephen Frost by email at firstname.lastname@example.org or telephone (66) 2 231 6201/6455.