Business Registered At Rental House, Extra Taxes

[NewInvestor]

Does anyone here know the answer to the following question?

A business associate of mine is renting a house in Thailand. He is setting up a business and wants to register it at the house he is already renting.

The landlord says that is OK if the renter pays the extra taxes and enters into a new lease with everything the same except the added price for "rent", i.e., the landlord apparently isn't reporting his income from the house rental and wants the renter to pay his taxes, in effect. However, the landlord has never done this before and is not sure about how much he will pay in taxes.

My associate finds this reasonable but wants to know how much the landlord really pays for taxes and double check everything.

Does he pay 7% VAT in addition to rent?

Does the landlord also pay some sort of property tax or just personal income tax, i.e., is the tax for rental property the same as personal income or is it calculated separately because it is property?

[joskydive]

CON!!!!!!!!!!!!!!!!!!!!!!! The business pays the tax not the property owner.

Edited May 20, 2009 by joskydive

[NewInvestor]

CON!!!!!!!!!!!!!!!!!!!!!!! The business pays the tax not the property owner.

Not a con. It appears the property owner must pay 12.5% tax on rental income. If you Google it, this comes up often. However, I've seen other wrong things be repeated on the internet. This is also interesting in that the lessors do not pay personal income tax on rental income, but instead pay a separate rental income tax, if I understand this correctly.

See this discussion this year on ThaiVisa.com :

http://www.thaivisa.com/forum/Thai-Propert...ed-t239928.html

If the company is renting the property and paying for the rent, and the company has VAT (as required for a work permit), but the owner does not have VAT, does the company pay 7% VAT to the government?

Or what tax does the business pay for renting a place?

[katabeachbum]

Everyone is supposed to pay 12,5% tax on rental income, but nobody does. But if its registered as an adress for business (in business register) I assume the owner doesnt dare to not pay any more.