Tax Letter from City Hall for Company House Ownership

[dksharron]

How many other people have received a letter from City Hall requesting many back years of payment of taxes/fees for having a company own a house?   The yearly fee is about 7500 baht for ten years.

 

I have friends in different developments who purchased their houses at different times, two  purchased ten years ago, while another one purchased three years ago.

 

 

 

 

 

 

[jackdd]

You forgot to mention about which province you are talking.

But obviously it means it's time to get rid of these illegal structures before they take the houses away.

[KittenKong]

A friend of mine in Pattaya got one two weeks ago. I think the total was around 100,000B, and was backdated about 10 years.

[dksharron]

Yes, same here.

 

10 years x 7500 = 75000

 

The other guy was , I believe, 3 years x 7500 = 22500

 

Odd though, there is no fee or penalty for not paying for ten years.

 

When one friend, the ten-year one, went to City Hall, they were operating by the seat of their pants, writing on a piece of paper.  It was not all computerized, computer generated, but like scraps of paper on which they would make notes.

 

I have been told by one lawyer, that it is either not enforceable, or will not be enforced = not to worry about it.

 

About two years ago, we had to get  a tabien bahn on a house we bought dirt cheap, and in order to do it, we needed to pay this tax.   As the house was so cheap, we did not fight it.  We did receive a discount from 75000 to 43000.

 

Thank you for your input.

 

 

 

[dksharron]

"You forgot to mention about which province you are talking.

But obviously it means it's time to get rid of these illegal structures before they take the houses away."

 

Sorry -  Pattaya 

[Delight]

Was the letter written in English or Thai?

 

 

 

[KittenKong]

The one my friend got was in Thai.

[baansgr]

Most people  I know pay an accountant or lawyer somewhere between 12k to 18k a year, is this a different  tax you are talking  about?  I also know of 2 cases,  one through death,  another the owner just left the house  for 8 years.  Both instances,  the properties had been seized and needed back payment and fines to rectify

 Don't know if City Hall,  DBD was involved. This is Pattaya area

[KittenKong]

Yes, a completely different tax. My friend's house company accounts were fully up to date.

[dksharron]

Agreed here.  All DBD taxes are up to date.  This is from City Hall.  Yes, both of my friend's letters were in Thai.     Thanks to  everyone for input.

[topt]

A short thread here from last year - see last post - 

There was also another thread but cannot seem to find that. 

[topt]

Longer thread here 

 

[dksharron]

Thank you for the additional thread information. 

[dotpoom]

I have a house in a company name for the last 8 years...I have the accounts done every year by a Lawyer....other properties in the past have had done by an accountant.

   Are you getting the back dated bills because you have never done the yearly accounts or paid whatever tax due (a tiny amount for the tax) total cost in my case 12,000 Bt. yearly.

   If you have never had the yearly accounts done...why ever not?

[Mattd]

This, unfortunately is completely correct, as the property / land is owned by a business and not technically being used as the owner's occupied residence, the same tax applies to landlords that rent their houses out, houses that are owner occupied do not attract this tax.

The tax is 12.5% of the actual or theoretical annual rental value, so for arguments sake they deem that the property and land has a rental value of 10,000 Baht per month, then the annual tax would be 15,000 Baht.

Reductions can be had if the property is unoccupied. pro-rata.

Those getting demands for several years of back tax should consider the statute of limitations, which is 10 years, plus how old the property is / how long it has been registered in the company name etc. 

The Company should always submit a tax return in February of each year, highlighting the rental revenue from the property, if any (remember this is theoretical, the city hall can decide if they think it is BS) and then pay the taxed owed within 30 days of the assessment, failure to submit a return is a 200 Baht fine, failure to pay the tax owed within 30 days results in a 2.5% levy on the tax owed, increasing to 5% for the 2nd month, 7.5% for the 3rd and 10% for the 4th month, after that they can seize the land and property and sell it to recover owed taxes.

 

This tax is 100% enforceable, so those who haven't paid any land and property tax for their company owned land and house, then perhaps expect the bill soon and sack your accountants for not doing this, as they should be doing.

It seems that somebody in Pattaya City Hall has suddenly realised on the revenue they have been missing out on!!

 

[catman20]

On 5/28/2018 at 10:58 AM, KittenKong said:

A friend of mine in Pattaya got one two weeks ago. I think the total was around 100,000B, and was backdated about 10 years.

i had the same letter maybe a year ago i think it was for something like 200,000 baht for 10 years. in Pattaya also

[dksharron]

Thanks to everyone for their contribution

Edited June 2, 2018 by dksharron

[dksharron]

6 hours ago, dotpoom said:

I have a house in a company name for the last 8 years...I have the accounts done every year by a Lawyer....other properties in the past have had done by an accountant.

   Are you getting the back dated bills because you have never done the yearly accounts or paid whatever tax due (a tiny amount for the tax) total cost in my case 12,000 Bt. yearly.

   If you have never had the yearly accounts done...why ever not?

 

This is different.  The house owners pay their company taxes every year, about 11,000 baht.

[dksharron]

3 hours ago, catman20 said:

On 5/28/2018 at 10:58 AM, KittenKong said:

A friend of mine in Pattaya got one two weeks ago. I think the total was around 100,000B, and was backdated about 10 years.

i had the same letter maybe a year ago i think it was for something like 200,000 baht for 10 years. in Pattaya also

6 hours ago, dotpoom said:

 

 

Has City Hall every made a second contact to you or your friend concerning this requested payment?   

 

[catman20]

10 hours ago, dksharron said:

 

 

Has City Hall every made a second contact to you or your friend concerning this requested payment?   

 

No,  i did take it to a accountant who told me that cos my house is in a company name they think im either operating a business from here or im some sort of sub letting property business. let sleeping dogs lye is my attitude. either way i dont think its enforceable. on another quick note cos my house is in a company name the water board have two rates business rate and private rate, they have had me on the business rate for 10 year got it changed now but no refund for the last 10 years.

Edited June 3, 2018 by catman20

[dksharron]

Thanks.   I would like to know if anyone with a house in Banglamung  or anywhere outside of Pattaya has every been asked for this tax.  

[Destiny1990]

So by sending letters demanding for additional tax payments for this company house ownership structure is this then become a legal way of home ownership?

[jackdd]

13 minutes ago, Destiny1990 said:

So by sending letters demanding for additional tax payments for this company house ownership structure is this then become a legal way of home ownership?

No, why should it? They just want tax because a company owns a building, this could also be a "real" commercial building

[Destiny1990]

2 minutes ago, jackdd said:

No, why should it? They just want tax because a company owns a building, this could also be a "real" commercial building

Hmmmm i doubt its that simple.

why they just send them out now after all these years?

seems this only gets send out to farang with company structure homes. But its a good money maker.

[Henryford]

18 minutes ago, Destiny1990 said:

So by sending letters demanding for additional tax payments for this company house ownership structure is this then become a legal way of home ownership? 

Post 15 seems to confirm it's a business tax so nothing to do with home ownership. The poster claims it is 12.5% of an annual rental value. Surely the rental value of a house would be at least 300-500,000 pa. So could the tax be as much as 50,000?

[catman20]

7 hours ago, Destiny1990 said:

Hmmmm i doubt its that simple.

why they just send them out now after all these years?

seems this only gets send out to farang with company structure homes. But its a good money maker.

only if people pay .........................i dont know anyone who has paid.

[blackcab]

10 hours ago, Henryford said:

Post 15 seems to confirm it's a business tax so nothing to do with home ownership. The poster claims it is 12.5% of an annual rental value. Surely the rental value of a house would be at least 300-500,000 pa. So could the tax be as much as 50,000?

 

The tax is called Par See Rong Ruan. I have posted about it extensively in the past. The tax is levied by the District Office on most forms of rental income.

 

The tax is not levied on private homes that are occupied by the owner.

 

The problem some people are facing is that if a residential building is owned by a company then Par See Rong Ruan becomes payable, even if a company director lives in the premises.

 

This scenario was discussed in this forum 1-2 years ago.

[Destiny1990]

1 hour ago, blackcab said:

 

The tax is called Par See Rong Ruan. I have posted about it extensively in the past. The tax is levied by the District Office on most forms of rental income.

 

The tax is not levied on private homes that are occupied by the owner.

 

The problem some people are facing is that if a residential building is owned by a company then Par See Rong Ruan becomes payable, even if a company director lives in the premises.

 

This scenario was discussed in this forum 1-2 years ago.

So a residential building can be owned by a company by a farang?

Thinking this was an illegal ownership structure but now they are getting taxed... How can illegal ownership construction get legally taxed?

[blackcab]

Off topic posts have been removed.

[blackcab]

3 hours ago, Destiny1990 said:

So a residential building can be owned by a company by a farang?

Thinking this was an illegal ownership structure but now they are getting taxed... How can illegal ownership construction get legally taxed?

 

Please read my post again. I did not say a residential building can be owned by a company that is owned by a non-Thai person.

 

That whole discussion is well off-topic. This thread concerns letters demanding payment of par see rong ruan tax.

 

It doesn't matter what nationality the shareholders of a company are. If the District Office believes tax is payable they can issue the letter.