Thailand

Inheritance tax of 10% on estates over Bt50m approved

PHUKET MEDIA WATCH

– Thailand news selected by Gazette editors for Phuket’s international community

Inheritance tax of 10% on estates over Bt50m approved
The Nation / Phuket Gazette

PHUKET: The Cabinet yesterday gave the nod to a draft bill for the country’s first-ever inheritance tax.

“The tax will be a form of income distribution,” Prime Minister Prayut Chan-o-cha said after the Cabinet meeting.

The tax rate will be 10 per cent, as expected, and only assessed on estates worth more than Bt50 million.

Prasong Poontaneat, director general of the Excise Department, said 16 draft organic laws supporting the Inheritance Tax Act would also be tabled with the National Legislative Assembly.

There might be 10,000 people liable for the inheritance tax.

Those liable under the law include Thai individuals and juristic people, foreign individuals and juristic people domiciled in Thailand for at least three years, plus foreign individuals and juristic people bequeathed assets located in Thailand. The draft bill will be sent to the NLA for deliberation this month and should take effect in the third quarter of next year.

It would become law in about six months, or at the end of March, after publication in the Royal Gazette, but there would be a three-month grace period before enforcement begins.

Gift tax on assets above Bt10m

Under the bill, a gift tax of 5 per cent would be levied on assets that are valued above Bt10 million transferred to heirs before the principal’s death.

The assets, which must be registered, include houses, land, cars, bonds, deposits and other securities.

Recipients of such assets who are not heirs would include them in their personal income tax return.

To be efficient, Thailand might apply the gift tax as well as a deduction in line with the inheritance tax like in the UK, Japan and South Korea, according to a recent study conducted by Kasikorn Research Centre.

Normally, income tax imposed on inheritance is unlike other taxes, as sums collected are often less than 0.5 per cent of gross domestic product.

KResearch suggested that the government prepare a database linking state agencies that it could examine to ensure the taxes are collected efficiently.

About 70 per cent of people surveyed last week by the National Institute of Development Administration supported the Finance Ministry’s plan to collect inheritance tax at the 10-per-cent rate on an amount higher than Bt50 million.

It found that 9 per cent of the 1,249 respondents saw the rate as too high while 6 per cent saw it too low and 13 per cent were opposed to the inheritance tax.

— Phuket Gazette Editors

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