Orbortor Tax On Our Guesthouse

[simon43]

Here in Phuket we own a 10-room guesthouse. It is not classified as a hotel since it has less than 12 guest rooms.

The local OrBorTor has now visited us to advise (for the 1st time in 2 years), that we have to pay a tax to them based upon the number of guest-rooms we have, the nightly rate per room, the fact that we have a restaurant and that we also have a swimming pool.

Does anyone have more details about this tax?, what legislation is relevant concerning this tax etc??

The actual tax is called rongreun (โรงเรือนที่ดิน) - Structured Usage Tax (Checking further, this seems to be levied at 12.5% of the assessed gross rental value of the business). My Googling states that 'lessees are not subject to this tax'. What does that mean in practice? Our guesthouse is on rented land. Does that make us lessees and therefore not required to pay this tax???

Thanks

Simon

Edited June 9, 2008 by simon43

[keestha]

Here in Phuket we own a 10-room guesthouse. It is not classified as a hotel since it has less than 12 guest rooms.

The local OrBorTor has now visited us to advise (for the 1st time in 2 years), that we have to pay a tax to them based upon the number of guest-rooms we have, the nightly rate per room, the fact that we have a restaurant and that we also have a swimming pool.

Does anyone have more details about this tax?, what legislation is relevant concerning this tax etc??

The actual tax is called rongreun (โรงเรือนที่ดิน)

Thanks

Simon

I have a 14 room resort in Khao Lak (Phangnga), and I have to pay the rongruen tax to the OrBorTor every year in February. This year it was 16104 Baht. It is calculated according to the number of rooms and the nightly rates. When I go to the OrBorTor to pay this tax, they only ask about the rooms and not about other facilities such as the restaurant.

By the way the tax for your signposts (I think it is simply called phasee paai) you also have to pay to the OrBorTor.

[simon43]

Hi Keestha - thanks for your reply;

Our 10 room guesthouse has been assessed at 48,500 baht:

Swimming pool = 4,000 baht x 12 months x 12.5% = 6,000 baht

Restaurant = 4,000 baht x 12 months x 12.5% = 6,000 baht

10 rooms at 1,000 baht per night x 365 days x 8% (why??) x 12.5% = 36,500 baht

Maybe the 8% is assuming that the rooms are only occupied 8% of the time???

Simon

[Chang_paarp]

Monty should be able to give the Chon Buri / Banglamung answer to that.

Earth to Monty!!!

[cmsally]

I think you will find the tax on the swimming pool and restaurant can be included by the Or Bor Tor. How they put a value on those is anyones guess but the rooms are charged via percentage and nightly rate.

Or Bor Tors are at present sniffing around for more money as if they can raise large enough yearly amounts, they can apply for the status of Tesabahn. The status of Tesabahn gives them more power; and as we all know more power is a good thing

What you need to do is go to the Or Bor Tor (not you - send a Thai person) and negotiate. Tell them

1. You are not always full

2. You close down for a couple of months in low season (true or not doesn't really matter).

3. You don't have the money to pay.

I know many Thai people who just refuse to pay, they don't hand money over easily for taxes.

Last bargaining chip which follows on from the no money to pay is that you will pay in installments.

You must do the bargaining sooner rather than later as when the amount to be charged is official and signed by the relevant people it cannot be reversed. Talk to any Thai person and they will tell you taxes are negotiable and of course it does sometimes depend on who you know.

[monty]

Just saw this thread.

Yep, you do indeed pay those taxes to Or Bor Thor.

However, as Cmsally posted, you really need to get a Thai person there to negotiate.

We pay 15,000 Baht/year, for a 35 room resort, 21 m pool, restaurant, bar, gym, snooker hall, the whole works.

Original quote came in at close to 100,000 Baht/month, but after some tough negotiating and the donation of a PC (12,000 Baht basic version) our negotiator brought it down to the 15,000 we now pay

Things which really strengthen your position is how much you bring to the local population. We buy our beer and alcohol from the local pooyai baan, we employ quite a few of the locals as gardeners, maids etc...

Along with the fact that we are of the beaten track, unlike the city center hotels.

And luckily our Or Bor Tor is nowhere near becoming a Tesaban, so they do not have a lot of pressure to increase revenue...