30% Withholding On A House Purchase?

[minimart]

Sorry if this has been covered in other topics but i need a bit of clarity!

I live in KK and am hoping within the next week or so transfer approx 2 million baht from my bank in England to pay for a 2nd holiday home in Loei and the balance on my new car.

The simple question is will LOS withhold 30% of this? I went to my Thai bank (SCB) and nobody could give me a proper answer, not even the manager. He said "It should be O.K." -yeah right! I'd hate to transfer the money and have 30% sitting there for a year. I went to the BOT website but I wasn't exactly clear on their exemptions.

Between us me and my Thai wife have 3 bank accounts in thailand. Would it work to transfer the amount spread between the 3 accounts?

Thanks for any info.

minimart

Edited February 3, 2007 by minimart

[Nawtilus]

If you write 'property purchase' on the reason for transfer with the t/t, it will not be held. I t/t'd 35k over and all ok.

If your extremely worried and doubtful, but should not be and you do not mind paying the extra t/t fees, then just do as you said and t/t over under 20k each time.

[Maestro]

If you write 'property purchase' on the reason for transfer with the t/t, it will not be held. I t/t'd 35k over and all ok.

From reports so far it really depends on the individual bank branch. One person got his remittance exempted by simply explaining, on the phone, that the money was for living expenses while another hat to bring signed contracts for his condo purchase.

With the very non-committal answer of minimart’s bank manager minmart may want to play it safe and, as you suggest, make several remittances, each below the equivalent of USD 20,000. These remittances can even be all to the same account in Thailand and will be all exempt.

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Maestro

[Geppis72]

If you write 'property purchase' on the reason for transfer with the t/t, it will not be held. I t/t'd 35k over and all ok.

From reports so far it really depends on the individual bank branch. One person got his remittance exempted by simply explaining, on the phone, that the money was for living expenses while another hat to bring signed contracts for his condo purchase.

With the very non-committal answer of minimart’s bank manager minmart may want to play it safe and, as you suggest, make several remittances, each below the equivalent of USD 20,000. These remittances can even be all to the same account in Thailand and will be all exempt.

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Maestro

Yes but under 20.000 Us

he will not get the thor thor 3 and he will be not Tax Exempt when he will sold the property.

That's also why this kind of transfers are exempt from the 30% tax.

Do not worry if you have yours docs in order and your "genuine" intention....

Regards

[Nawtilus]

What is this 'tax exempt' thingy ?? when you sell ??

[minimart]

Thanks for all the replies. I think the safest bet is sending the money in 3 lots to 3 separate bank accounts. Once again thanks.

[Geppis72]

What is this 'tax exempt' thingy ?? when you sell ??

When you purchase a property and you make the transfer over

20.000 Us you are allow to ask Thor thor 3 to the reciving Bank.

When You sell the property you show your TT3 and you are

exempt from tax for the same amount you bring in earlier.

You pay tax on profit on exceeding amout when you rempatriate the money.

Let's say you got an house for 5 mil Bath, and you sell it for 6 mil bath.

You will pay tax on 1 million only because this is the pure profit.

Without TT3 you will pay tax on FULL amount you going to send back,

which is absolutely fair.

Cheers

[Nawtilus]

Presume there is ways around this, but thanks for the explanation.

[Maestro]

Thor thor 3...pay tax on profit

I seem to remember reading that the ThorThor 3 has been done away with and that it is now the Foreign Exchange Transaction Form one can get for inward remittances equivalent to minimum USD 20,000.

I believe I also read on this forum that the percentage of tax payable, respectively tax exemption, on the profit from the sale of real estate depends on the number of years the property was held, not on the origin of money used for the purchase. I may be wrong on this and hope somebody will quote the official source.

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Maestro

[Paul MBMG]

Thor thor 3...pay tax on profit

I seem to remember reading that the ThorThor 3 has been done away with and that it is now the Foreign Exchange Transaction Form one can get for inward remittances equivalent to minimum USD 20,000.

I believe I also read on this forum that the percentage of tax payable, respectively tax exemption, on the profit from the sale of real estate depends on the number of years the property was held, not on the origin of money used for the purchase. I may be wrong on this and hope somebody will quote the official source.

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Maestro

There are various taxes payable

the stamp duties upon purchase sale (te split of these between buyer and sell should be covered in the S&P agreement)

specific business tax depending upon the period held

income tax (based on the sale price rather than the profit)

land and house tax (payable by corporate entities)

I'm assuming that we're talking about a foreigner making the remittance to acquire an interest in property. Tor Tor 3/FETF would only be relevant in terms fo a property transaction as proof of property purchase for condominium as this is all that can be acquired directly by a foreigner unless we're talking about one of the special exemptions which doesn't seem to be likley here - in this case we may well be talking about land and house

Sounds to me as though it would be worth considering making a transfer/series of transfers to the foreigner's individual account to purchase any house in his name and separately transfers to the entity/person buying the land

If the land is being bought in a company then the money remitted isn't actually for the purpose of buying the land, technically it's for the purpose of investing in the company that's buying the land. As long as it's invested into the company as capital and this is documented then this ius qualifying FDI and no 30% deduction applies.

If it's loan capital then a deduction should apply to transfers over the stipulated amount but this is being applied rather patchily throughout the kingdom.

In short

Buying condo - exempt from 30%, liable to the taxes detailed above, able to remit the amount brought in back overseas using the FETF

Buying house - should be considered in own name on land rented from the landholder - unclear how the 30% provision would apply - technically a house on rented land may well not qualify

Acquiring land - depends on the conduit used to purchase the land, FDI applies to corporate capital but not loans. Companies have to pay annual L&H tax on the property.

Does that help?

[Simmo]

Thor thor 3...pay tax on profit

I seem to remember reading that the ThorThor 3 has been done away with and that it is now the Foreign Exchange Transaction Form one can get for inward remittances equivalent to minimum USD 20,000.

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Maestro

Correct, but ask for your FETF form at a bank and you will get confused looks. Ask for a Tor Tor 3 and they'll know exactly what you want.